How Much Cash Do You Need to Put an Offer in?


If you’ve been shopping for a home, you may have noticed that many homes are going under contract quickly — and that can mean one thing: You need to put an offer in fast. But putting an offer can be tricky, especially when you’re not sure how much cash you need.

First, you need to make sure you physically have the cash on hand to buy a home. That could mean selling investments or consolidating your savings from multiple accounts so you have enough to cover your down payment and closing costs.

Next, it’s important to get prequalified or preapproved for a mortgage loan before making an offer on a home. This will give you a better idea of how much you can afford and help you avoid offering more than the home is actually worth.

Your real estate agent or Realtor will also be able to help you craft an offer that’s competitive and within your budget. They’ll have a great deal of insight into what other offers are out there and how they compare to yours. Read more


Another way to make your offer more appealing is by including earnest money. This is a small deposit that’s held in an escrow account and applied to your down payment at the time of closing. It typically ranges from 1% to 2% of the purchase price, depending on your local market.

Having an earnest deposit makes your offer more likely to be accepted, especially if the market is crowded or if there’s competition. In fact, according to Tom Willerer, chief product officer at Opendoor, buyers who use his company’s cash offer program see their bids win 50% more often than those with traditional mortgaged offers.

In addition to removing financing contingencies, cash offers are also much faster than those that use conventional mortgages. Closings on all-cash deals can be completed in as little as 14 days, compared to 30 to 60 days for a mortgage contingent sale.

The speed and certainty that cash offers bring can be a huge benefit for sellers, too. When a seller has to worry about financing falling through, it can set their sale back weeks or even months. Moreover, they might not receive as much money for their home as they would have if the transaction had closed with conventional mortgages.

You should consider offering a higher price than the asking amount, though. That’s especially true if the market is hot, and you want to take advantage of the seller’s reluctance to accept lower-than-asking prices.


Aside from speed and ease, cash offers are also attractive to sellers because they remove a mortgage-related risk from the transaction. That means they won’t have to worry about whether or not you can get approved for a loan, and the seller will be more confident in the sale.

But, be aware that a mortgaged sale still requires a large down payment and other associated closing costs. In some cases, you might even have to pay these out of pocket. This can be a major drain on your liquidity, so you should plan accordingly.

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