Leave a Message

Thank you for your message. We will be in touch with you shortly.

Is Cash the Name of the Game?

April 15, 2023

Real Estate Tips

Is Cash the Name of the Game?

If you ever watch real estate shows, you’ve probably heard the term “all-cash buyer.” It’s usually thrown out as a way to sweeten a deal, but what’s the reality about buying a house in cash? The world isn’t a TV show, and there are pros and cons to buying a house with cash as opposed to getting a mortgage.

Buying a House with Cash Is Increasingly Uncommon
If you’re in a position where you could buy a house with cash, you’re in the minority. With the median home sales price in the mid-300,000s, it’s not realistic for most people. Around 87% of home buyers finance according to the National Association of Realtors’ 2020 Profile of Home Buyers and Sellers.

The Upsides of Paying Cash
If you’re part of that fortunate 13% of buyers that don’t need a loan, the benefits are myriad:

  • You’re a more attractive buyer to sellers. This is a big one right now. There is a huge amount of demand for homes in many parts of the country and a limited inventory. This means bidding wars. One way to be more competitive when you make an offer is to pay cash. That’s preferable to sellers because then they don’t have to worry about what happens if your mortgage financing falls through. A cash-only transaction is also usually faster, so you can get to the closing quicker, which sellers tend to like.
  • When you buy a house in cash, you don’t have to worry about a mortgage payment of course, but you’re also not going to be paying the interest and fees that come with a home loan.
  • Cash buyers have lower closing costs because they’re not paying the fees associated with a mortgage like lender fees and loan origination fees.
  • A faster closing isn’t just a benefit for the seller. It’s advantageous for the buyer as well. You might be able to close on a home within a week of your offer being accepted. If you buy with a mortgage, it can take a month or more.
  • Once you close, the home really is yours. You don’t have the fear of not being able to make the payments and subsequently losing your home.

The Downsides of Paying Cash
There are a couple cons of paying cash for a home that you might need to consider.

  • Your money isn’t liquid. If you’re using all of your cash to pay for a house, it’s not going to be easy to access it when you need it.
  • Depending on the market, you could possibly make better returns by putting your money into another type of investment as opposed to putting it all into a house.
  • You won’t be able to take advantage of mortgage tax deductions. With itemized deductions, you can deduct the interest paid on the first $750,000 of your mortgage, so your taxable income goes down.

If you’re weighing whether or not to buy a house in cash, it can be a good idea to talk to a financial professional first. They can go over all the different scenarios and how that choice could affect you for better or worse. Of course, if you’d still have money in savings or investments after buying a house with cash, then it might make the decision easier.

Explore Our Other Blogs

Stay Updated On Our Most Recent Blog Posts

Looking for the best real estate agent in San Jose? Get expert tips on how to choose the right local professional for your home buying or selling journey. | Block Change Real Estate

Real Estate

Expert Advice on Choosing the Right Real Estate Agent in San Jose

Brian Ng  |  May 30, 2025

Expert Advice on Choosing the Right Real Estate Agent in San Jose
Stage your Evergreen Hills home like a pro. Get expert tips to attract buyers and sell faster with Block Change Real Estate. | Evergreen Hills Selling Guide

Seller's Real Estate Tips

How to Stage Your Home for a Quick Sale in Evergreen Hills

Thao Dang Pham  |  May 29, 2025

How to Stage Your Home for a Quick Sale in Evergreen Hills
Discover San Jose's housing market forecast through 2030. Gain insights into price trends, neighborhood dynamics, and investment opportunities with Block Change Real Estate.

Real Estate

San Jose Housing Market Forecast: What to Expect Through 2030

Thao Dang Pham  |  May 28, 2025

San Jose Housing Market Forecast: What to Expect Through 2030
Top 5 Mistakes to Avoid Buying in San Jose | Block Change Real Estate

Buyer's Real Estate Tips

The Top 5 Mistakes to Avoid When Buying Property in San Jose

Brian Ng  |  May 27, 2025

The Top 5 Mistakes to Avoid When Buying Property in San Jose
Learn how one family bought their dream home in Evergreen Hills under budget. Get the strategy behind their win. | Block Change Real Estate Evergreen Expert

Buyer's Real Estate Tips

Case Study: How One Family Bought a Home in Evergreen Hills Under Budget

Thao Dang Pham  |  May 26, 2025

Case Study: How One Family Bought a Home in Evergreen Hills Under Budget
Decode real estate terms with our San Jose-specific glossary. Learn key terms like Mello-Roos, Prop 13, and more. | Block Change Real Estate Guide

Real Estate

A Local's Guide to Real Estate Terms in San Jose: What Every Buyer & Seller Should Know

Brian Ng  |  May 23, 2025

A Local's Guide to Real Estate Terms in San Jose: What Every Buyer & Seller Should Know

Let's Talk

You’ve got questions and we can’t wait to answer them.

FOLLOW US ON INSTAGRAM