How the Heck Is Everyone Making All-Cash Offers on Homes? Here’s the Secret

If you’ve been paying attention to housing market news, you’ve probably heard more and more buyers are using all-cash offers in order to win bidding wars.  In fact, the National Association of Realtors reported that 32% of home sales in 2024 were cash offers—the highest it’s been since 2014. As mortgage rates remain stubbornly high and competition for homes is fierce, all-cash offers might seem like the only way to get an offer accepted. However, an all-cash offer doesn’t necessarily mean you have all the cash available. Instead, the real secret is delayed financing.

Why Make an All-Cash Offer on a Home?

If you’ve ever been to an open house and seen the line snaking out the door, you know how challenging a competitive housing market can be. To get your offer accepted, you’ll need to stand out to the seller and be ready to act fast.

All-cash offers signal that you’re ready to close as soon as possible, and you have the funds to buy the home without financing (which can slow down the homebuying process for all involved). Sellers might see you as the most reliable offer since they know the sale is less likely to fall through if, for some reason, you don’t qualify for financing.

If you’re the buyer, you can save yourself the hassle and cost of getting a mortgage (more on that in a moment). With an all-cash offer, you’ll get a faster closing time and fewer contingencies. Essentially, it streamlines the process.

Understanding Delayed Financing

With delayed financing, a buyer uses their own cash to purchase the home before getting a traditional mortgage (and essentially reimbursing themselves for buying the home). Buyers still have to meet the same lender requirements for this loan as they would if they had gotten it before buying the home with cash.

Delayed financing is just another way to purchase a home without leaving you cash poor, similar to buying a home and immediately doing a cash-out refinance, so you can pay off the original mortgage and have extra funds for whatever you choose.

Alternatives to Delayed Financing

If delayed financing doesn’t sound like a good fit or you can’t come up with the initial cash, you’ve still got other options:

• Cash offer services: lf you want to appear competitive by making an all-cash offer, but you don’t have the cash for delayed financing, you can work with a cash offer service like Homeward or Orchard. They make a cash offer on your behalf and you repurchase your home with a mortgage. Keep in mind that these firms charge fees for their services.
• Bridge loans: A bridge loan is a short-term loan that gives funding when financing isn’t available. For example, if you’re waiting for your home to sell, you could take out a bridge loan in order to make an offer.
• Home equity lines of credit (HELOCs): You can borrow from the equity you have in your current home in order to make an offer on another home. Although it’s a creative solution, it’s risky since you could lose both homes if you fall behind on payments.
• Upfront underwriting: In a competitive housing market, you may want to go through the underwriting process before you find a home and want to put in an offer. Upfront underwriting gives you the bank offer, so you appear more serious and reliable to the seller.

The Bottom Line

Delayed financing can be the secret that gets your offer on a home approved. Remember, although you make the all-cash offer, you’ll recoup the money with the mortgage you immediately take out once you get the home. If delayed financing doesn’t work for you, you can always ask a trusted financial advisor about cash offer services, bridge loans, and other lines of credit.