When a buyer wants to pay cash for a home, agents sometimes relax. No lender, no appraisal, easy. That's the mistake. Cash removes loan risk, but the buyer still needs title protection, an inspection, and a safe way to move a lot of money. Here's how I run a cash purchase so it's fast and still protected.
The short answer
A cash buyer shows proof of funds with the offer, skips the loan deadlines, and can close fast, often in two to three weeks. They still get a title commitment and owner's title insurance, still inspect, and can still order an appraisal if they want one. The biggest new risk is wire fraud. The money moves in one big wire, and criminals know it.
Step by step
- Get proof of funds up front. A recent bank or brokerage statement, or a letter from the institution, showing enough for price plus closing costs. Black out account numbers. Some sellers ask for it with the offer.
- Ask where the money is. Money in stocks or retirement accounts may take days to free up. Money from a home sale may depend on that closing. Plan the timeline.
- Write a cash offer on the standard contract. In Colorado, cash buyers still use the Contract to Buy and Sell. Mark the purchase as cash and skip new-loan sections. Your managing broker can confirm.
- Keep the protections that matter. Inspection objection, title review, HOA documents, and survey or ILC. See title commitment.
- Decide on an appraisal. No lender requires one. If the buyer is paying near the top of the market, a private appraisal can be cheap insurance.
- Set a short, realistic closing. Title usually needs several business days for the commitment. Two to three weeks is common.
- Warn about wire fraud in writing. Tell the buyer to call the title company at a known number to confirm wiring instructions. Never trust emailed changes. See wire fraud warning.
- Mention delayed financing. Some buyers pay cash to win, then take a mortgage shortly after closing to get cash back. That's a lender conversation. Send them to a loan officer before closing if they want that option.
Why sellers like cash (and what it's worth)
- No loan approval risk
- No appraisal gap fight
- Faster closing
- Fewer deadlines that can fall apart
That's why a cash offer can win at a lower price. But the seller still compares net and terms. See handling multiple offers.
How to explain it to your client
"Paying cash makes your offer stronger and faster, but we're still going to protect you. You'll get a title commitment and an owner's title policy, and you'll get an inspection. If you want an appraisal, we can order one even though no bank needs it. The one thing I need you to promise me: before you wire a dollar, call the title company at the number I give you today. Not a number in an email. Wire fraud targets cash buyers."
Watch-outs
- Wire fraud. The single biggest risk on a cash deal. Repeat the warning at contract, a week out, and the day before closing.
- Proof of funds must match the price. Plus closing costs. An old statement or a too-small balance hurts credibility.
- Don't skip title insurance. Cash buyers have no lender making them buy it. They should anyway.
- Large-sum reporting. Title companies may have federal reporting steps for some all-cash purchases. Let title handle it.
- Not tax advice. Where the money comes from can have tax effects. CPA question.
Further reading
- Buying a home with cash on kennarealestate.com
- Pay cash or finance in Colorado on kennarealestate.com
This is training for real estate agents. It isn't legal, tax or lending advice. A licensed loan officer sets loan terms. Check with your managing broker.
Questions
Does a cash buyer need an appraisal?
No lender requires one. The buyer can still order one.
How fast can a cash deal close?
Often two to three weeks, depending on title and HOA documents.
Do cash buyers still get inspections?
They should. Cash doesn't fix a bad roof.
What counts as proof of funds?
A recent statement or institution letter showing enough money. Hide account numbers.
Can my buyer get a mortgage after paying cash?
Some lenders allow delayed financing after closing. The buyer should talk to a loan officer before closing.
Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.