Real Estate Agent and Trainer, Robert Rico, explains the advantages of buying real estate property with all cash. Do you want to see more video blogs? Subscribe here!


CA Realty Training here with another update on some real estate terminology and situations! We wanted to give you our take on cash buyers – something agents are encountering more and more in today’s hot market.

Firstly, is it even a good thing to be a cash buyer? In almost every case, the answer is “Yes – very much so!” It helps smooth the transaction along, makes everyone more at ease, and in general just makes things more seamless.

So, let’s say you’re buying a home — in an expensive city like our native Los Angeles, a million dollars will buy you a decent family home. So, why fork over one MILLION dollars in ONE transaction, instead of spreading it out over 30 years of manageable payments? Well, there are many benefits.

Here are 5 benefits to purchasing Real Estate property with cash:

  2. You can, with cash, almost completely eliminate your closing costs. There is no lender involved, so the title insurance can be skipped (thousands of dollars, in many cases). In addition, there is no mortgage insurance, no loan doc fee, and a much lower escrow fee.

    Closing Costs

  4. Another cost that can be eliminated – at the buyer’s discretion, however – is the appraisal cost. A lender will always require an appraisal, but if the cash buyer thinks the home is worth what he’s offering, then he can waive the appraisal inspection requirement. However, a lot of buyers still do want an appraisal, so this is a less-common cost to save. Plus, it’s a few hundred dollars – it could be VERY worth it down the line!

    Home Appraisal

  5. NO LOAN.
  6. In addition, without a lender, you save a lot of time, hassle, and money while originating a loan. There’s no loan origination fees, no verification of employment, no rent history to check, and many other things that can be skipped when a large loan doesn’t have to be originated. Many lenders charge a “point”, which is one percent of the loan amount, as their fee — that’s ten grand for a million-dollar loan!! Also, as a cash buyer, as long as you have a proof of funds, you cannot be rejected by any lender.


  8. However, by far, the biggest benefit to cash buying is the fact that you don’t pay interest on the purchase price of your home. You may think interest rates are low — and 4% is a low interest rate! — but that’s an annual percentage rate on your money. Over the course of the loan, you can end up paying 70% of the loan amount in interest, on a simple 30-year fixed loan at a low rate. On a million dollar loan, that’s seven hundred thousand dollars — an enormous savings over the life of the home!

    Save Moneyts

  10. This point is a self-explanatory benefit. Purchasing a home takes time, especially when there are third-party lenders involved! Because a cash-buyer can avoid the process of loans, and just avoid a lot of other time-consuming occurrences, buying property in all cash can save a lot of time. Close that deal!

    Close Fast

So, if you want to move quickly, lower your escrow fees, and save yourself a LOT of money on interest — pay cash! Everyone loves a cash buyer.

Most of the time, cash buyers are market-savvy, in touch with the different factors at play, and very aware of the benefits (and drawbacks) to purchasing with cash. As an agent, if someone walks into your office with cash for a deal – keep them happy! You will have a much smoother escrow, quicker process, and a much shorter time till you receive your commission check… never a bad thing!


Never Miss a New Post

Sign-up for our email newsletter to get notified when we publish new content to help you become the best real estate agent you can be

You have Successfully Subscribed!