The Pros And Cons Of A Cash Buyer

Cash buyer
South Florida attracts many cash buyers from other, more expensive markets.

Whether you are a home buyer or seller, it is generally assumed that cash is king. Of course, in many circumstances, this is certainly true. In markets such as South Florida, it has become increasingly difficult to compete in the home buying market if you are not a cash buyer. With many Americans opting to leave states with higher costs of living and moving to The Sunshine State, the competition for homes has reached record levels in recent years.

In a competitive real estate market, cash buyers often have an advantage over buyers who need to finance their purchase with a mortgage. This is because cash buyers can make an offer without having to go through the mortgage underwriting process, which can take several weeks or even months. We share some of the pros and cons of a cash buyer below.

Pros of a cash buyer

  • Quicker closing process: Cash buyers can typically close on a home much faster than buyers who need to finance their purchase. This is because there is no need to wait for the mortgage to be approved.
  • More competitive offers: Cash buyers are often able to make more competitive offers than buyers who need to finance their purchase. This is because sellers know that cash buyers are less likely to fall through with the deal.
  • No mortgage interest: Cash buyers do not have to pay mortgage interest, which can save them thousands of dollars over the life of the loan.
  • No mortgage payments: Once you buy a home with cash, you are free from the burden of monthly mortgage payments. This can free up your cash flow for other expenses or investments.
  • Buyers may get a better price: Cash buyers typically have more negotiating leverage due to their lack of having any financing contingencies. Oftentimes, this may result in a lower sales price.

Cons of a cash buyer

  • Potential less liquidity: When purchasing a home with cash, this directly reduces that cash liquidity that buyers have for other potential investments. Depending on the mortgage rate that could be available, it is possible that this money could earn a greater return elsewhere.
  • Miss out on tax benefits: Cash buyers do not get to take advantage of the mortgage interest deduction, which can save borrowers thousands of dollars in taxes each year.
  • Sellers may have to settle for less money: Oftentimes, cash buyers know that they can offer a little less money for the property since there are no financing contingencies with their offer. As a seller to a cash buyer, it is likely that you may need to take a little less money in exchange for the peace of mind of not having financing contingencies.


Ultimately, the decision of whether or not to buy a home with cash is a personal one. There are pros and cons to both approaches, and the best option for you will depend on your individual circumstances. In markets such as here in South Florida, we continue to see a large percentage of homes being sold to cash buyers. This is particularly evident with buyers that are relocating here from other higher-priced markets such as New York or California. Needless to say, this has greatly increased the already competitive home buying market throughout South Florida.

Are you looking to buy or sell property in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.

By natasha moore

REALTOR® with Live South Florida Realty, Inc.