How does the closing differ when buying with CASH vs Traditional Financing?

Asked by Hassan Raazee, San Diego, CA Wed Apr 24, 2013

I am going to be buying a home with CASH. I was wondering if we still have to go through the Escrow Companies to close the transaction ? Since there is no financial institution involved ?

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Stefanie Coh…, Agent, Weston, FL
Sun Apr 28, 2013
You still have to make an earnest money deposit which must be held in escrow, and all of the title work must be done, and the deed recorded.

While a cash transaction is much easier than a financed transaction, it does not eliminate escrow deposits or title work. All of the documentation must be handled by either a title company or an attorney.
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Eileen Keder…, Agent, Fort Lauderdale, FL
Sun Apr 28, 2013
A cash offer will often give you a better purchase price depending on other terms. You can close quicker and reduce closing costs associated with a financed purchase . While an escrow. Agent is not necessarily required, the seller will almost certainly require a deposit which will likely mean either an attorney or real estate office will hold the deposit.
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Marsha Umans…, Agent, Tamarac, FL
Wed Apr 24, 2013
Wheather financing or buying cash, you need to make an earnest money deposit to show you are serious about your offer. Somebody has to hold your earnest money deposit in an escrow account until closing. The closing itself is no different, just less papers to sign. Best of Luck.
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marc jablon,…, Agent, Boca Raton, FL
Wed Apr 24, 2013
You still go through the escrow process because someone has to hold your deposit. Also, you want to make sure you have clear title to the property before you pay for it in full. That involves using a title company. That company can hold the escrow deposit, or your attorney can hold it, or your real estate broker's company can hold the deposit.

Because you have no mortgage, you won't be paying tax escrows up front to a bank. You will pay the taxes to the county on your own.

You will be paying tax and HOA prorations at the time of closing.

After that aspect of the paperwork is taken care of by an attorney or title company-- for a cash closing it's about 10 minutes -- the checks pass, the keys are exchanged and you move into your new home.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
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Antonio Vega…, Agent, Saint Cloud, FL
Wed Apr 24, 2013
The main difference is that you SAVE the cost of financing product (paying for loan, home appraisal, survey). So the closing cost drop to below 2% of the property price (at least here in Central Florida). Of course your offer is more likely to be accepted, since closing can happen is as little as 14 days and you will be required to make a larger escrow deposit, usually 10%. Was this answer helpful? If so please click on the "green thumbs up" or the "best answer".

Tony Vega
Antonelli Realty
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Ryan Hanrahan, Agent, Fort Lauderdale, FL
Wed Apr 24, 2013

The main differences would be that you don't have all of the mortgage documentation, but more importantly there would be a difference in your closing costs associated with the purchase which would less without the additional lender fees. You would still go through a title company and/or attorney to insure you are receiveing a clear title without any liens. They will also handle the transfering of funds between parties. Hope this helps.


Ryan Hanrahan, PA
Christopher White Group
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Meir Aloni, Agent, Plantation, FL
Wed Apr 24, 2013
Doing a cash closing will save lots of trees:)
With no mortgage, once the title work is done, you can close...

Did you like this post? If so please click on the "green thumbs up" or the "best answer". Thank YOU!

With enthusiasm,

Meir Aloni & Team

CRS (Certified Residential Specialist)

CDPE (Certified Distressed Property Expert)

RECS (Real Estate Cyberspace Society)

Successfully selling Broward County since 1986!

Direct phone# 954-338-5220
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Tom Sommers, Agent, Lakeville, MN
Wed Apr 24, 2013
With a cash offer there is a lot less paperwork for the buyer to fill out because they don't have a mortgage. So the time is cut in 1/2 and you don't have to wait for funding from the bank. This is about it.

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John Bourassa, , Fort Lauderdale, FL
Wed Apr 24, 2013
The only difference is a cash closing takes only 1/2 hr vs. a financing closing takes 1-1/2 hr. and a zillion of signatures.
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