Cash offers promise speed and simplicity, which is exactly why people search for cash home buyers when life throws curveballs. Job relocation with a short fuse, a property that needs more repairs than you can afford, a divorce where both sides need a clean break, or a home stuck in probate that none of the heirs want to manage. When you choose the sell my house fast route, closing costs don’t vanish, they just shift around. The trick is knowing what they are, who typically pays them in a we buy houses transaction, and how those choices affect your bottom line.
I’ve sat across the table with sellers who were relieved to wrap up in seven days, and others who wished they’d asked three more questions about fees before signing. You don’t need a law degree to understand this. You do need plain language, a few real numbers, and an honest look at trade-offs.
What “we buy houses for cash” really means
Cash doesn’t always mean a bag of bills. It means the buyer doesn’t rely on a mortgage lender. They use their own funds, private capital, or an investment line. That bypasses the usual mortgage underwriting and cuts timelines to days instead of a month or two. No lender means fewer contingencies and fewer people who can stall the file, which is why cash home buyers can often close fast even with title quirks or dated properties.
These buyers usually purchase as-is, so you can skip repairs and showings. They also tend to use simple contracts and local title companies that know how to handle distressed or inherited properties. The trade-off is price. Investors have carrying costs, risk, and resale plans, so they rarely match the top retail price you’d hope for on the open market after fixing the place up. That discount isn’t just profit. It also covers closing costs they sometimes absorb to make your life easier.
The anatomy of closing costs in a cash sale
Closing costs are the unavoidable friction of transferring real estate. Some are state-dependent. Some are negotiable. Not every cost appears in every deal, but you’ll see a familiar set over and over:
Title search and title insurance. The title company digs into public records to confirm ownership, liens, easements, and other baggage attached to the property. An owner’s policy protects the buyer against title defects, while a lender’s policy protects a bank. In a cash deal, there’s no lender’s policy. Fees vary widely by state and property value, but expect the title search and exam to run a few hundred dollars, and the owner’s policy to run a few hundred up to a couple thousand depending on price.
Escrow and settlement fees. Someone has to shepherd funds, collect signatures, and record documents. In some states a title company handles this, in others an attorney does. Fees often land in the 300 to 1,200 range, sometimes more with attorney closings or multiple payoff statements.
Recording and transfer charges. Counties collect recording fees for the deed, often 50 to 200. Some states or cities add transfer taxes. Transfer tax formulas vary. You might see a flat percentage of the sale price, a tiered rate, or a split between buyer and seller by local custom.
Property taxes and prorations. Taxes get prorated to the day of closing. If your county bills in arrears, you might credit the buyer for the period you occupied the home. If taxes are prepaid, the buyer might credit you back.
Liens and HOA balances. Any unpaid property taxes, municipal utility balances, code enforcement fines, or HOA dues must be satisfied at closing. That can surprise sellers who haven’t lived at the property for a while. I’ve seen water bills that doubled because of a slow leak, and HOA accounts with special assessments owners never opened.
Attorney fees. In attorney states, each side might have counsel. In some markets, the buyer’s attorney represents the transaction, and the seller may not need their own. Fees can range from a few hundred to a few thousand depending on complexity.
Survey and municipal inspections. Some locales require a survey or a city transfer inspection. Investors will often order and pay for a basic survey if needed, but municipal compliance items can fall back on the seller unless negotiated otherwise.
Payoff and release fees. Your mortgage payoff includes principal, interest to the payoff date, and a small statement fee. If there are junior liens, expect separate payoff letters and recording of releases.
Home warranty, termite letters, and extras. In retail deals, buyers sometimes ask for warranties or pest letters. Investors usually skip warranties, but a termite letter can still be required in certain jurisdictions or just for buyer peace of mind.
None of these items are glamorous. They’re the nuts and bolts that get the deed recorded and the money wired. The question that matters is who pays what in a we buy houses for cash deal.
Who typically pays closing costs in investor purchases
With retail buyers, sellers often pay the commission, transfer taxes in some states, and their half of closing services. With cash investors, the allocation is more flexible. Many we buy houses companies advertise that they cover all closing costs. In practice, that usually means they pay the title, escrow, and recording costs, and sometimes transfer taxes. They still expect you to cover obligations that are uniquely yours, like mortgage payoffs, delinquent taxes, HOA arrears, and municipal fines. If a city requires a pre-sale inspection, whether they cover repairs noted in that inspection depends on the agreement.
I’ve seen two flavors of cash buyer:
- The “simple fee” buyer who sets a purchase price and covers customary closing costs, then nets you the amount less your payoffs and prorations. The “line-item” buyer who offers a higher price on paper but shifts more closing costs to your side. When the settlement statement lands, the net can be the same as the first buyer’s offer.
Both approaches can be fair. What matters is the net. A one-page offer that says “We pay all closing costs” feels clean, but ask for a sample settlement statement based on your property’s taxes and known liens. Numbers clarify promises.
The all-cash timeline, step by step
Time pressure is the main reason people call cash buyers. When speed is the priority, every day matters. A normal cash sale can wrap in seven to fourteen days if title is clean and no municipal hurdles appear. With probate or complex liens, plan for three to six weeks. Here’s how the flow usually goes:
You submit the property address and a short description. They ask about the roof age, foundation, HVAC, and any known issues, then either run comps or visit.
They present a preliminary offer. Reputable buyers will explain how they derived the number. You should expect a discount from retail, but drastic lowballing is a red flag in average-condition neighborhoods.
Walkthrough. A brief visit confirms condition. Investors focus on big-ticket items: roof, plumbing, electrical panel, foundation, windows, and kitchen and bath age. Cosmetic damage rarely scares them.
Purchase agreement. A straightforward contract, often state-approved, with a closing window that matches your needs.
Open title. The buyer orders title work right away. Title exam, payoffs, and municipal lien searches kick off.
Clear title or cure issues. If something pops up, like a small mechanics lien quick house sale from a contractor five years ago, the title company tracks down a release. If a judgment exists, you might negotiate a reduced payoff.
Settlement and funding. You sign the deed and a few affidavits, the buyer wires funds to title, the title company pays off your liens and taxes, and wires your net proceeds.
No lender means no appraisal, no loan processing, and no last-minute underwriter conditions. But cash deals still live or die by title clearance and municipal compliance.
The three nets: price, costs, and time
When people ask whether we buy houses offers are fair, I ask for three numbers:
The as-is retail value today. This is what a conventional buyer might pay if you listed the house without repairs and waited through showings. In some markets, as-is places still fetch strong prices. In others, financed buyers will demand repairs to close.
The investor’s offer. That’s the number on the purchase agreement. We compare it to as-is retail minus repair costs, holding costs, and the certainty premium the investor offers.
Your net. This is the only number that matters. It includes your payoffs, prorated taxes, and whichever closing costs land on your side. It also includes time.
Time has a dollar value. A vacant house costs money every day in taxes, insurance, utilities, and risk. If speed saves you two months of payments and potential theft or water damage, that savings belongs in the net calculation. For a typical home with a 2,000 dollar monthly cost between payment, taxes, and utilities, cutting sixty days saves about 4,000. If the investor covers 2,000 in closing fees as well, that’s real money added to your net even if the contract price is lower.
How investors think about pricing, and why that affects costs
Investors buy in order to hold as rentals, renovate and resell, or wholesale to another buyer. Each model handles closing costs differently.
Buy and hold. The buyer focuses on stable cash flow. They might pay slightly more than a flipper because they’re not chasing a resale spread, and they often have relationships that reduce title and recording costs. Many cover standard closing fees to keep deals simple.
Fix and flip. Renovators price your house based on after-repair value, minus rehab, minus profit, minus closing costs on both the buy and the later resale. Because they know they’ll pay closing twice, they frequently aim to shift some costs to you or anchor the offer lower. If they promise to pay all costs, they’ve already built those fees into the offer.
Wholesale. A wholesaler signs a contract with you, then assigns it to another investor for a fee. They rarely want to pay closing costs and sometimes craft contracts that push everything to the seller. That’s not inherently bad, but you’ll want transparency. Some wholesalers are pros who disclose their fee and deliver a smooth closing. Others play musical chairs with buyers. If the sell my house fast contract includes a long inspection period and a small earnest deposit, ask more questions.
You don’t need to memorize their spreadsheets. You do need to see clearly what picture their offer paints for your net.
Common closing cost myths in cash sales
Cash means no closing costs. False. Cash means fewer lender-related costs, but you still have title, escrow, recording, prorations, and obligations like HOA dues.
Investors always pay all costs. Not always. Many do, some don’t. Even when they do, obligations tied to you, like unpaid taxes or citations, are yours unless the investor explicitly agrees to cover them within the deal price.
Title issues kill cash deals. Title issues can slow things down, but good title officers clear old liens and filing errors every day. The harder cases involve large judgments, federal tax liens, or unreleased mortgages from decades ago. Those require patience and precise paperwork. Cash buyers are usually more willing to wait because they don’t have a lender timeline.
The highest offer is the best. The best offer is the highest net with the smoothest path to closing. A 210,000 offer with you paying transfer taxes and escrow might net you less than a 205,000 offer where the buyer pays everything except your payoffs.
You’ll lose money if you don’t list. Sometimes true, sometimes not. If the house is clean and financeable, listing might net you more even after commission. If the property needs 40,000 in repairs and you can’t spare the time or cash, a quick as-is sale often beats the risk and hassle of a retail run.
Reading your settlement statement without a headache
The settlement statement, often called the ALTA, is where promises turn into math. It shows the purchase price, debits and credits, and your final wire.
On the buyer’s side you’ll see their cash to close, title policy if they paid it, and any agreed fees. On your side you’ll see mortgage payoffs, taxes prorated to the day, HOA or utility payoffs, and a list of closing charges. If the buyer truly covers your side of title and escrow, those lines will show as paid by buyer.
Two spot checks save headaches. First, scan the tax proration. If you’ve already paid the current period’s taxes, make sure you get credited properly. Second, confirm every lien listed is legitimate. I’ve caught the same small lien listed twice with slightly different names. It was a data import glitch, easy to fix before wires go out, harder to unwind after.
If something looks odd, ask the title officer to walk you through it. Good ones will. And if you prefer a translator, ask your buyer’s rep to hop on a three-way call with title. Speed doesn’t have to mean confusion.
Real numbers: how closing costs change the net
Take a modest home with an as-is retail value of 250,000. It needs a roof and electrical updates. You owe 138,000 on the mortgage, and taxes run 4,800 per year.
You receive two offers.
Offer A is from a reputable investor who says we buy houses for cash and we pay most closing costs. They offer 205,000, pay title, escrow, and recording, and set closing in 10 days. You’ll cover prorated taxes and your mortgage payoff. Transfer tax is customary for the buyer in your county. Title finds a 1,200 mechanics lien from a fence project, which the investor agrees to pay as part of the deal.
Offer B is from another investor who offers 213,000 but asks you to split closing costs and pay transfer taxes. They’ll need 21 days.
Now the math, simplified. Offer A: 205,000 minus mortgage payoff of 138,000 equals 67,000. Subtract prorated taxes, say 1,600, leaves 65,400. Add that the buyer covers the 1,200 lien and the 1,000 of settlement fees you didn’t pay, you’re still roughly at 65,400 net. Offer B: 213,000 minus 138,000 equals 75,000. Minus your half of closing fees at 1,000, transfer tax at 1 percent equals 2,130, and similar prorations at 1,600, leaves around 70,270. B looks better by about 4,800. But if you’re carrying 2,000 per month in costs and prefer to close in 10 days, Offer A’s speed saves you roughly 2,000 to 3,000 compared to three weeks or more. Now the gap is closer to 2,000. If speed helps you secure another purchase or avoid a second month’s payment, that might tip the scales.
The point isn’t that A beats B. It’s that your decision should rest on the net, including time, risk, and certainty.
When a cash buyer truly shines
I worked with a seller who inherited a duplex with one vacant unit and one tenant who hadn’t paid in months. The property needed plumbing work, the city had cited the porch, and probate had just closed. Listing the duplex would have required addressing the porch and bringing smoke detectors into compliance, plus negotiating access with an unhappy tenant. An investor stepped in, covered all regular closing costs, took the property with the tenant in place, and closed in 12 days. The price was lower than what a renovated duplex would fetch by a wide margin, but compared to the as-is retail price with concessions and delays, the net was within 5 to 7 percent. The seller avoided a two to three month slog, eviction, and unknown repair scope.
I’ve also seen the opposite. A clean single-family home in a strong school district drew a cash offer 10 percent under market with the promise of zero closing fees. A weekend open house on the MLS brought a financed buyer at 3 percent under market with a quick 30-day close. The seller netted more by listing, even after commission and a minor repair concession. The cash buyer wasn’t wrong to offer a discount. It just wasn’t the right fit for that property.
Red flags and green flags with “we buy houses” companies
A few patterns separate smooth operators from time-wasters.
- Green flags: earnest money deposited quickly with a reputable title company, a short inspection period, specifics about who pays which closing costs in the contract, and a buyer who can show proof of funds without hesitation. Red flags: a tiny or delayed earnest deposit, a long inspection window that lets them shop your deal to others, vague language about closing costs that leaves you guessing, or pressure to sign a deed before you see a full settlement statement. If they suggest using an unfamiliar out-of-area title company without a good reason, ask for alternatives.
You don’t need to be adversarial. You do need clarity. When the contract says buyer pays all standard closing costs, ask the title company to annotate the estimate with line items that will be paid by buyer versus seller. Everyone relaxes when the math is clear.
How to prepare your property so closing costs don’t balloon
Even as-is sales benefit from light preparation. You’re not painting and staging. You’re preventing surprises that turn into last-minute costs.
Locate your mortgage statements and account numbers so the title company can request payoffs day one. If you have an old HELOC that shows a zero balance, verify the lien was properly released and recorded. Those ancient HELOCs are notorious for lingering on title.
Call your utility providers for final balances and shutoff dates. A final water bill that includes sewer and trash, in cities where those attach to the property, should be paid through closing to avoid a lien.
Check HOA status. Ask for a current ledger. If there’s a transfer fee, know the number and who usually pays it in your development. Some HOAs require resale packages that cost a couple hundred dollars. If the buyer covers closing costs, ask whether that includes HOA transfer and resale documents.
If your city requires a point of sale inspection, book it early. If violations are noted, ask the investor if they’ll accept the property and assume responsibility post-closing. Many will, via escrow holdbacks or affidavits that shift compliance duties to the buyer.
Gather keys, remotes, gate cards, and any appliance manuals. Clean paperwork leads to clean closings.
The special case of selling while behind on payments or in foreclosure
When you’re behind, the math moves fast. Fees and interest accrue daily. Cash buyers can catch you up and close before a sale date, but only if there’s time to order payoffs and clear title. If a foreclosure sale is three days away, even a motivated buyer may not be able to stop it.
Communicate with your lender’s loss mitigation team and ask for a written reinstatement quote. Share it with the title company through a secure channel. Cash buyers who have handled pre-foreclosures will coordinate with the trustee or attorney to ensure funds hit before deadlines. Expect a bit more in closing costs for rush payoffs and overnight couriers, but those charges are minor compared to losing the house at auction. Also, verify whether your state has a right of redemption window, as that can affect timing and title insurance requirements.
Taxes and the day after closing
Closing day feels like the finish line, but a few details happen after the wire hits. The county records the deed, then updates tax records to the new owner. If taxes were prepaid through escrow with your old lender, you might receive a refund of any remaining escrow balance thirty to sixty days after payoff. Keep your forwarding address updated with your lender for that reason.
For federal taxes, gains on a primary residence may be excluded up to 250,000 for single filers or 500,000 for married couples filing jointly if you meet the ownership and use tests. If the property is an investment or you’ve owned it for a short period, plan on capital gains treatment. Cash buyers don’t create a special tax situation. The form of payment doesn’t change the IRS view. If you sold at a loss relative to your adjusted basis on an investment property, talk to your tax professional about deductibility limits. For estates, the step-up in basis at death can be a huge benefit if you’re selling inherited property, as it reduces taxable gain.
Making the right choice for your situation
Here’s a simple way to compare paths without getting lost in jargon:
- Request at least two investor offers and a listing estimate from a trustworthy agent who has sold homes in your area within the last six months. Ask each investor to specify which closing costs they pay and to provide a draft settlement statement using current tax figures, mortgage payoff estimates, and any known liens. Put each option into a three-line grid for yourself: contract price, total seller-paid closing costs and obligations (excluding your mortgage payoff), and days to close. Then compute your net after payoff and approximated prorations. Add or subtract the cost of time as it applies to your situation.
That small exercise takes an hour and removes guesswork. If the cash offer nets close to what you’d get after a month or two on market, speed and certainty might be worth it. If the gap is wide and your house is financeable, listing may serve you better.
Final perspective
We buy houses for cash slogans promise a relief valve when circumstances pile up. The process can be fast, humane, and financially sensible. It can also be confusing if you don’t see how closing costs flow through the deal. Push for clarity. Use the title company as a resource. Remember that the bottom line is your net, not the headline price, and time counts as money. With that lens, you can choose the path that fits your reality rather than the one that simply sounds good in an ad.