How an All-Cash Offer Can Help You Win a Bidding War

Sponsored by What's this?

In today’s real estate market, home inventory is at an all-time low and cash homebuyers have the advantage. In fact, a recent study from researchers at the University of California San Diego found that in the last 10 years, cash buyers have paid about 11% less than those using a mortgage.

Understanding the benefits of buying a home with cash can help you level the playing field and land your dream home. Below, we share insights on the advantages of becoming a cash buyer and positioning yourself to have your offer accepted.

The Rise of Bidding Wars

The COVID-19 pandemic has led to some notable upswings in the housing market. Throughout 2020, the desire for homeownership increased and many residents of big cities such as New York and San Francisco began to seek housing in lower-cost suburban areas. In turn, this shift led to a highly competitive market with new areas of the country seeing significant growth.

While the competitive nature of the market has endured into 2022, the real estate industry has adapted and there are plenty of resources available to help buyers navigate the path to homeownership. Knowing how to navigate each step is a great starting point and it can take the guesswork out of the process.

Some of the most important steps to take include prepping your budget, finding a real estate agent, taking out a mortgage, and researching properties. Being able to make a cash offer can also offer a significant competitive advantage.

Why An All-Cash Offer Can Help You Land Your Dream Home

Making an all-cash offer doesn’t mean showing up with a briefcase of money, but it does mean buying a home outright. With an all-cash offer, buyers must have the money necessary to purchase the house in an account that allows for immediate withdrawals and transfers. These accounts are usually checking accounts, savings accounts, or money market accounts.

There are several advantages to making all-cash offers, and their popularity has grown dramatically in recent years. In July 2021, cash sales accounted for 23% of existing-home sales, a 7% increase from the previous year. The share of cash sales has since trended up since the second half of 2021, peaking at a high of 25%. In 2022, cash buyers make up 27% of all home purchases. 

Some of the advantages of all-cash offers include limited contingencies, less hassle and fees, streamlined closing procedures, and possible savings. All-cash offers can also speed up the homebuying process and even lead sellers to accept a lower bid. One of the reasons cash offers are more appealing to sellers is that they don’t entail as many buyer-financing risks. They also allow for relatively quicker closing times.

How to Choose the Right Lender

While buying a home with cash has historically been reserved for those who had the funds readily available, this has changed in recent years. Several lenders now offer the ability to buy a home with cash and secure financing afterward. It’s important to note, however, that not all lenders can offer the same benefits. Choosing the right lender can help to ensure that you can get approved quickly and close on your new home without delay.

As a trusted lender with an A+ BBB rating, New American Funding can help. Their Buyer Accepted Program lets you bid with confidence knowing that you’re backed by a cash offer. Once the sale goes through, Buyer Accepted will sell the home to you once you have permanent financing in place with New American Funding, and will even rent it to you through the close of the second escrow.

An added benefit of choosing New American Funding is that you’ll be partnering with one of the nation’s top lenders who is diligently working to provide you with a simplified cash offer process. The beginning of your home search will start with getting approved by New American Funding, then finding your dream home, and making a competitive cash offer. What’s more, if you currently own a home, you won’t need to sell it before purchasing a new one. Homeowners using the Buyer Accepted program will have up to 90 days to sell their existing homes.

With the housing market being more competitive than ever, making an all-cash offer can increase the likelihood of winning a bidding war. With a careful plan and the power of cash on your side, you’ll be able to land the home of your dreams.

For more information, please visit New American Funding now.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. SSRN Papers. "The Mortgage-Cash Premium Puzzle,” Accessed 15 Apr. 2022.

  2. National Association of Realtors. "Cash Sales Rise to 23% with Growing Entry of iBuyers and Fin-tech Companies,” Accessed 18 Apr. 2022.

  3. National Association of Realtors Research Group. "REALTORS® CONFIDENCE INDEX SURVEY,” Accessed 18 Apr. 2022.