The tight housing market of the last few years gave home sellers a substantial edge. Many buyers had to bid over a home’s asking price just to have their offers considered. That led some savvy shoppers to make all-cash offers on homes, as it offered more certainty for sellers (making those bids more appealing) and gave buyers some much-needed negotiating power.
Although many predicted the housing market would loosen up in 2025, economic uncertainty and high mortgage rates have upended those hopes. Not surprisingly, the strategy of paying all-cash for a new home – which became increasingly common in recent years – may be an even more valuable tool in 2025.
An increasingly popular homebuying strategy looks better than ever
If you’re a prospective or first-time homebuyer without much equity, or you didn’t successfully navigate the stock market, putting in an all-cash offer can feel like a far-fetched strategy, not worthy of consideration.
However, what some prospective buyers might not realize is that all-cash homebuyers can pay on average 10% less than mortgage buyers, according to a study from University of California San Diego Rady School of Management.
All-cash offers can benefit both buyers and sellers in ways that go beyond a lower sales price.
All-cash offers may save buyers money
Because sellers sometimes lower their asking price for all-cash offers, buyers can often save money on the home’s sale price. For buyers who already own a home, an all-cash approach may help dodge the financial strain of qualifying for two mortgages at once. It also means avoiding double mortgage payments and carrying costs while waiting for the existing home to sell.
More certainty for sellers
Sellers often look more favorably at all-cash offers because they tend to provide greater certainty and dependability that the deal will go through. Sellers don’t have to wait out contingencies, such as the loan approval process, related appraisals and other factors.
In fact, the appeal of all-cash offers can be so strong that it’s not unusual for sellers to accept an all-cash offer even if it wasn’t the highest bid for a home. The slightly lower sale price often seems like a good tradeoff in exchange for increased certainty that the deal won’t fall apart and a faster closing.
All-cash buyers have more negotiating power
The perception that cash offers are more likely to close also gives buyers more leverage when it comes to negotiating with sellers on price, closing terms and other contingencies. Sellers are aware that all-cash offers can proceed more efficiently and with fewer hiccups, so they’re more willing to bargain with those buyers over a variety of considerations.
Faster closing times
All-cash home sales can often close more quickly than sales financed with mortgages, with many realtors sharing an all-cash sale can be completed in just two weeks. Remember that sellers typically have timelines of their own they must deal with, such as moving dates, closing times on their new properties, estate sales, and so on.
All-cash offers can make it easier to buy and sell a home at the same time
Coordinating the sale of an existing home with the purchase of a new one can be stressful, whether buyers must sell first to qualify for a new loan or simply want to avoid carrying two mortgage payments.
Many homeowners need to sell their current property before they can qualify for a new mortgage. An all-cash offer helps eliminate contingencies, allowing the buyer to secure the next home first and move at their own speed, making it easier to secure the new home even while their current one is still on the market.
Some buyers can qualify for two mortgages but worry about carrying both payments. An all-cash offer can simplify this process by making their purchase more competitive and closing faster, giving them greater flexibility and peace of mind when buying and selling at the same time.
Conclusion
Given the many uncertainties facing the housing market in 2025, the strategy of offering all-cash for a home seems more appealing than ever for both buyers and sellers. In an environment challenged by limited home inventory and tighter lending requirements, all-cash homebuying strategies offer a viable lifeline for some to obtain their homeownership dream.
Miguel Villegas is the Director of NAF Cash.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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