Cash Sales & Closing Costs: What to Expect (Homeowner’s Guide)

April 27, 2021

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If you’re buying or selling a home for cash, you might wonder, are there closing costs with a cash sale? This is important to determine for both buyers and sellers, as expensive closing costs can reduce a seller’s profits or increase a buyer’s costs significantly!

Cash home sales still come with closing costs, including but not limited to appraisal fees and inspection fees, title insurance and search costs, and attorney fees. The actual costs you’ll face will depend on your state, your sales agreement, and other factors, but they can add up to some 3% of the home’s selling price.

Since no two home sales are alike, it’s impossible to determine the closing costs with a cash sale you might expect. However, knowing a bit more about closing costs in general can help you determine what you might face when selling a home.

As always, discuss any questions you have about a home sale or purchase with a real estate agent or attorney, and read all agreements carefully before signing! This will ensure you understand that agreement and make the best financial decision when it comes to your home sale.

Are There Closing Costs With Cash Sales?

brown house for sale

Note some standard closing costs that should be expected with virtually any home or vacant land sale, so you can know what to expect when it comes to selling your home for cash!

Earnest money

Earnest money refers to a deposit from the buyer, held in escrow, that lets the seller know the buyer is serious about purchasing the home. The actual amount of this earnest money payment, if any, will be determined by state law, local real estate market and demands, the contract signed by the buyer and seller, and other such factors.

In many cases, earnest money deposits might cost 1% to 3% of the home’s purchase price. Note, too, that whether or not the buyer gets this money back if the deal falls through will be written in the sales contract.

Appraisal costs

Mortgage lenders typically require appraisals, but this doesn’t mean that a cash buyer won’t need an appraisal for your home! Many cash buyers rely on the advice of a professional appraiser when it comes to making an offer for a home and then negotiating with the seller. Most appraisals cost between $300 and $400.


As with appraisals, mortgage lenders typically require inspections before signing off on a home loan; however, cash buyers might also insist on an inspection before presenting an offer. An inspection will note if various materials are up to local codes, and if the home will need costly repairs anytime soon.

Buyers might also schedule additional inspections for a home, to evaluate factors not included on a standard inspection. For example, most real estate inspections don’t check for mold, termite or carpenter ant damage, or asbestos, and don’t include exterior structures such as wells or septic tanks. Most inspections cost between $200 and $800 each.


Land surveys note a plot’s legal boundaries. A homebuyer might not need a survey for urban properties, as these boundaries are typically marked by sidewalks, fences, driveways, and the like. However, for rural properties, larger lots, or other areas where the legal boundaries might be in question, a buyer might schedule a survey.

Verifying property lines is also vital for a buyer planning on land improvements; he or she will need to know where their property ends and a neighboring property begins before erecting a fence, as an example. Boundaries can also affect property taxes. While surveys are expensive, often averaging between $600 and $900, they are often worth that cost for buyers.

Title insurance and search fees

A title search establishes the history of ownership of a home or other property; this search will reveal if there are liens against the home, such as for unpaid taxes. Many states require a title search be performed before a home sale, and costs might average between $100 and $250.

Title insurance protects a new owner from challenges to their ownership for as long as they have that title in their name. While title insurance is often required by a mortgage lender, many cash buyers still purchase it as an added protection for themselves. Title insurance might average around $1000, depending on the home’s value.

Escrow costs

Escrow refers to a neutral third party, usually a bank or other financial institution, holding a sum of money until certain terms are met. That institution doesn’t do this for free, so there are almost always escrow fees involved in home sales! Most escrow costs are between 1% and 2% of the home’s sale price.


A notary public verifies that a person signing a piece of paper is actually that person! A notary is often hired to sit in on a closing and will notarize everything as it is signed; expect their costs to run about $100 for the entire closing.

Attorney fees

Some states require an attorney present during a closing, to ensure both buyers and sellers understand their rights and obligations, and all the “fine print” of their agreement. Attorney fees vary greatly from state to state and these costs are negotiable, but they might average between $400 and $1000 for a standard closing.

How Do You Calculate Closing Costs on a Cash Sale?

There is no simple way of calculating exact closing costs on any home sale, as attorney fees, title search costs, and other costs will vary from state to state and closing to closing! However, you might note some costs you can expect no matter the home’s price or location; for example, title searches, escrow, and notary costs are somewhat standard expenses even for cash sales.

A home seller or buyer might also “play it safe” and expect to pay up to 3% of the home’s sale price in closing costs. Three percent translates to $300 for every $10,000 and $3000 for every $100,000. As an example, if you sell your home for $50,000 in cash, closing costs might total $1500.

Paying Closing Costs on Cash Sales

Buyers and sellers always negotiate between themselves when it comes to closing costs; when a home sale involves a mortgage loan, those costs are often “rolled into” the loan itself, so that the buyer pays the costs but over time, with the rest of their mortgage loan. In some mortgage loan cases, the seller might pay closing costs, taking those expenses out of the money they receive for their home.

For cash sales, the buyer often pays those closing costs themselves but might lower their offer slightly, to compensate for those added fees. They might also avoid many of those fees because they don’t need to satisfy the demands of a mortgage lender; for example, they might not rely on a professional appraisal or inspection, but might only examine the property on their own. In turn, they might not lower their offer as much as if they were paying all the closing costs during a standard sale with a mortgage involved.

Why Is a Cash Offer Better for a Seller?

hand holding cash

There are a number of reasons why it’s better for a seller to work with cash offers rather than those needing a traditional mortgage. One important consideration is that a home seller doesn’t need to worry about a cash buyer losing their job unexpectedly, or otherwise becoming ineligible for a mortgage while in the process of buying. Cash sales rarely fall through, as can happen when dealing with a mortgage lender!

Cash home sales are also not as rare as you might think; according to Home Go, cash sales account for some 22% to 24% of single-family home and condo sales across the United States. In Florida, Georgia, and North Carolina, those numbers are even higher, as cash sales account for some 32% to 40% of home sales in those states! 

While only a real estate agent or attorney can advise you on the right choice for your home sale, note some reasons why many homeowners turn to cash buyers and especially those ensuring a fast purchase:

  • Standard home sales can take several months and become very cumbersome, as sellers need to clean and photograph the home, list the home through various marketing means, walk potential buyers through the house, schedule open houses, and the like. A cash sale means alleviating that hassle and inconvenience.
  • Sellers might also want to sell the home quickly to finalize a divorce proceeding or close out an estate, or otherwise satisfy a legal issue involving the property.
  • Selling a home quickly also means not having to face expenses such as property tax and utilities while the home sits on the market. As an example, if a couple were to decide to move in together, selling one home for cash fast is a convenient way of eliminating the expense of keeping up both homes, and without the hassle of having to put one house on the market and manage a traditional sale.
  • A fast cash sale also allows a homeowner to move quickly, such as for an unexpected job or military transfer, death or illness in the family, and the like.
  • Homes needing costly repairs, especially if the house is not up to local building codes, can scare off homebuyers, making the process even more complicated and time-consuming. A home seller might not have the money needed to update their home and make it more appealing to a wide range of potential buyers.
  • Some sellers might prefer to have cash quickly so they can use it for other purposes; for instance, some investments might offer more profit in the long run than equity you might eventually build up in a home.
  • Quick cash also allows a seller to pay off debt or have the money they need for a down payment on a new property you don’t want to miss out on buying!
  • A homeowner who is “under water,” meaning they owe more for a home than what it’s worth, might prefer a cash sale to pay off as much of that mortgage as they can. While the seller might still need to pay off some of that mortgage amount from their own pocket, this arrangement allows them to avoid interest payments, property taxes, and other costs.
  • In a highly competitive or “buyer’s market,” a home might remain unsold for years no matter its condition! A lower-price cash sale to an investor or property flipper might be the only option for some sellers in those areas.

Some Buyers Prefer Cash Sales

cash buyer for home

Whether it’s an individual buyer or a company specializing in cash home purchases, there are many reasons why a cash sale is beneficial for the buyer as well as the seller. Knowing why some buyers prefer cash sales can help a homeowner better present their home, and know what to expect throughout the process! Consider some common reasons for buyers to prefer cash purchases versus standard mortgages, and why they might purchase distressed properties in particular:

  • Property flippers buy low-cost homes and then make whatever repairs and upgrades are needed, to sell those homes for a profit.
  • Investment buyers might buy a home for cash and then use it as a rental property. A cash sale allows them to start earning profit on that purchase as quickly as possible.
  • A cash buyer might realize that the home’s lot is more valuable than the house itself, and is willing to buy the home for the land on which it sits. He or she might then demolish or move the house and resell or otherwise develop the lot.
  • Developers might also pay cash for several homes in a particular area; they can then remove those homes and build a new subdivision or commercial structure, or otherwise develop a large area at once.

Whatever the reason for a cash purchase, remember to include closing costs with that cash sale. This will ensure both buyers and sellers are prepared for that sale and know what to expect by way of costs and profits.

Bradenton Home Buyers - Sell Your House For Cash Fast is proud to offer this information to our readers and we hope it helped answer the question, are there closing costs with a cash sale. If you’re looking to sell your house for cash, fast, call us today! We are the leading experts in cash for homes in Bradenton, and our experienced team will ensure all your questions are answered every step of the way. To find out more or schedule your FREE consultation, call Bradenton Home Buyers - Sell Your House For Cash Fast today!

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