What a cash offer on a house is
A cash offer is an offer to buy a house with money the buyer already has, instead of with a mortgage. Without a lender, there is no loan approval, no lender appraisal, and no financing contingency that lets the buyer walk away if the loan falls through.
Cash sales are common. All-cash purchases were 27% of existing-home sales in the United States in September 2026, according to the National Association of Realtors.
Not every cash buyer is the same. A family paying cash for a move-in-ready home is buying it to live in. A company that buys houses as-is, like us, is buying a house it will repair and then resell or rent, and its offer reflects that work.
How cash buyers figure an offer
Most buyers who purchase as-is work from the same four numbers:
- The value after repairs. What the house would likely sell for once it is fixed up, based on recent sales of similar houses nearby.
- The repair costs. Everything the house needs, from a roof or a furnace to paint and flooring.
- The costs to buy, hold, and resell. Closing costs, property taxes, insurance, and utilities while the work is done, and the costs of selling the house again.
- A margin for the risk. Repairs can run over and prices can change before the house resells.
Some investors use a rule of thumb for the top of their range. Investopedia describes it as the “70% rule”: never pay more than 70% of a property’s after-repair value, minus the renovation costs. It is a rule of thumb, not a law or a standard, and buyers apply it differently.
How we figure ours. We look at the location, the condition, the repairs the house needs, and what comparable houses nearby have sold for recently. Then we walk you through how we got to the number, so you can check our math against your own.
How much lower cash offers usually are
Research on cash purchases finds a discount, and its size depends on the buyer and the house:
- All-cash buyers in general. A 2024 study in the Journal of Finance found buyers with a mortgage paid about 10% more than all-cash buyers on average, from 6% to 17% depending on the method (UC San Diego).
- The trend. The property data firm Cotality found sellers accepted an average 9% discount on cash purchases in 2025, up from 4% in 2021.
- Instant-offer companies. A study of iBuyers from 2013 to 2018 found they paid about 3.1% less than other buyers of similar houses (National Bureau of Economic Research).
- Off-market sales to investors. In Philadelphia from 2018 to mid-2022, houses that owners sold to investors off the market went for 51% less than comparable listed sales. The authors caution that the study does not show the investors caused the gap, and that many of these houses needed work (Drexel University).
The pattern is the one you would expect. A cash offer on a move-in-ready house can come close to market value. A cash offer on a house that needs major repairs will be further below it, because the buyer pays for the work. The way to know whether an offer is fair for your house is to compare it with what you would keep by listing.
Cash offer or listing: compare what you keep
The price in an offer is not what you take home. Fill in this worksheet with your own numbers, from an agent’s estimate and from each offer you get:
| What comes out of the price | Listing with an agent | Selling to a cash buyer |
|---|---|---|
| Agent commissions | Set in the listing agreement, and negotiable | None, when you sell directly to the buyer |
| Seller’s closing costs | Your share of the realty transfer tax, plus title and settlement charges | Set in the agreement; we often pay the closing costs |
| Repairs and preparation | Before listing, and any repairs the buyer asks for after the inspection | None, when the buyer purchases as-is |
| Carrying costs | Mortgage, taxes, insurance, and utilities until closing | The same, until the closing date you choose |
| The chance the sale falls through | The buyer’s financing, appraisal, and inspection | No financing to fall through |
A few of these deserve a closer look:
- Commissions are negotiable. Since the practice changes of August 17, 2024, a buyer’s agreement with an agent must state that “broker fees and commissions are fully negotiable and not set by law,” and offers of buyer-agent pay are no longer made on the multiple listing service (National Association of Realtors). Redfin reported that the average buyer’s agent commission on its sales was 2.42% in the third quarter of 2025, and 2.52% on homes under $500,000 (Redfin).
- The transfer tax. Pennsylvania charges a 1% state realty transfer tax, “often along with an additional local realty transfer tax,” and the buyer and seller are jointly liable for it (Department of Revenue). The agreement of sale sets who pays which share.
- Carrying costs add up. Every month the house is on the market, you keep paying for it.
Why some sellers take a cash offer
A cash offer is usually not the highest number. Sellers who take one are usually trading some of the price for something else:
- Certainty. No buyer’s financing to fall through, and no lender appraisal that comes in low.
- Time. No repairs or showings, and a closing date set by you rather than by a lender’s schedule.
- Condition. An as-is buyer prices the repairs into the offer, so you do not have to manage or pay for them first.
If none of those matter much to you and your house is in good shape, listing may leave you with more.
Proof of funds and earnest money
Two things show that a cash buyer can close:
- Proof of funds. A recent statement from a bank or lender showing the buyer has the money. Sellers of bank-owned homes often require it before they accept an offer, and you can ask any cash buyer for it.
- Earnest money. “A deposit a buyer pays to show good faith on a signed contract agreement to buy a home,” held by the seller or a third party and usually applied at closing (Consumer Financial Protection Bureau).
Money should move toward you, never away from you. The Better Business Bureau’s advice to sellers is plain: “Never give money to an investor before the closing date” (BBB). Close through a title company or settlement agent, and have a lawyer review the agreement if anything in it is unclear.