How to Make a Cash Offer With a Mortgage

Cash-offer financing programs give buyers who need mortgages the ability to make cash offers on homes.

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Updated · 4 min read
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Written by Barbara Marquand
Senior Writer
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Edited by Alice Holbrook
Assigning Editor

Investors and well-heeled buyers used to be the only ones equipped to make cash offers on homes. But now some real estate companies and lenders are giving buyers who need mortgages a chance to compete as if they have cash.

Here's how cash-offer programs work and what to consider before signing up.

What is cash-offer financing?

Cash-offer financing programs debuted in the past several years as the housing market heated up and a growing portion of buyers made cash offers to win bidding wars. Sellers like cash because they don't have to worry about a buyer having financing troubles that could delay — or prevent — the sale.

In March 2024, 28% of buyers paid with cash, according to a survey of real estate agents by the National Association of Realtors. That's down from 33% of recent buyers surveyed by NAR in February 2024 and similar to the 27% of buyers surveyed in March 2023.

Traditionally, a buyer gets preapproved for a mortgage and makes an offer on a home. The lender then orders an appraisal and title search and finishes underwriting the mortgage. If all goes as planned, the loan is finalized on the scheduled closing date, and the buyer gets the keys to the house.

With cash-offer programs, you still finance the purchase with a regular mortgage. But the cash-offer company agrees to purchase the home on your behalf before the home loan has closed. You then buy the home back from the company once your mortgage is final. Some programs agree to purchase the home on your behalf only if the loan isn't a done deal by a certain date. Either way, with a cash guarantee, the seller is assured of getting their money on time.

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