Selling a Property
What a cash offer really costs, and every deduction between the sale price and the cheque.
Price is not proceeds
The gap between headline price and money received is routinely fifteen percent or more: agent commission, seller closing costs, transfer tax, pre-sale repairs, buyer concessions and the mortgage payoff. Comparing a cash offer against a listing price rather than against net proceeds is the most common error sellers make.
Why cash offers sit below market
A cash buyer absorbs repairs, carrying costs, and the risk that the property does not resell at the expected price. That risk is priced in, typically as a discount of fifteen to thirty percent of market value. The offer is not necessarily unfair; it is buying speed and certainty from you, and the question is what that certainty is worth.
Carrying costs are real money
Every month a property sits unsold costs mortgage interest, tax, insurance, utilities and maintenance. On a typical home that runs into thousands per month, which is why a longer time on market narrows the gap between listing and a fast cash sale more than sellers expect.
Read the cash contract carefully
Some cash offers contain inspection periods, assignment clauses or financing contingencies dressed as cash. Those let the buyer renegotiate or walk after you have committed and stopped marketing. A genuinely non-contingent offer with proof of funds is a different product from a contract that merely says cash.
Capital gains and the exclusion
Gain is sale price minus selling costs minus cost basis, where basis includes the purchase price and capital improvements but not routine repairs. If the home was your primary residence for two of the previous five years, a substantial exclusion applies and most sellers owe nothing. Without it, the entire gain is taxable.
Getting the comparison right
Model both routes to net proceeds, using contractor quotes for repairs and a realistic time on market for your area. Then decide whether the difference is worth the speed. That is a judgement, but it should be made against a number rather than a feeling.
Common questions
Is commission negotiable?
Yes. It is set in the listing agreement, not by law, and the split between sides is also negotiable.
What counts toward cost basis?
Purchase price plus capital improvements such as a new roof or an addition. Maintenance and repairs do not count.