Most people see a cash offer that is $40,000 below asking price and walk away. And I get it. On paper, that number looks like a big loss. But here is the thing a lot of sellers find out too late: the higher offer on paper is not always the one that puts more money in your pocket at the end of the day. Once you add up the agent commission, the repair costs, the months of holding costs, and the very real chance the deal falls through, that lower cash offer can end up being the smarter move.
What a Higher Listing Price Actually Costs You
When you list your home with a real estate agent, the price on the sign is just the starting point. What most sellers do not fully plan for is how much comes off that number before you ever see a dollar.
The biggest cut is agent commission, which typically runs 5% to 6% of the final sale price. On a $700,000 home in Los Angeles, that is between $35,000 and $42,000 gone right away. Then come the repairs. Most buyers using mortgage financing will ask for a home inspection, and whatever the inspector finds, buyers will want fixed or credited. That often means another $10,000 to $25,000 out of your pocket.
Add in staging, professional photos, and general cleanup, and you are looking at a few thousand more before you even get an offer. And while all of this is happening, your carrying costs keep running. Mortgage payments, property taxes, insurance, and utilities do not stop just because your home is on the market. A traditional sale in Los Angeles can take 60 to 90 days or longer. That is real money leaving your account every single month.
The Hidden Costs That Eat Into Your Net Proceeds
Here is a breakdown of what a traditional sale on a $700,000 home in Los Angeles might actually look like when all the costs come out.
| Cost Item | Estimated Amount |
|---|---|
| Agent Commission (5.5%) | $38,500 |
| Pre-Sale Repairs and Updates | $10,000 to $20,000 |
| Staging and Cleaning | $2,000 to $5,000 |
| Carrying Costs (2 to 3 months) | $5,000 to $10,000 |
| Seller Concessions After Inspection | $5,000 to $15,000 |
| Closing Costs (non-commission) | $3,000 to $6,000 |
| Total Deductions | $63,500 to $94,500 |
So that $700,000 listing could realistically net you somewhere between $605,500 and $636,500 after everything is paid. And that is if everything goes smoothly, which it often does not.
When Deals Fall Through and What That Costs You
One of the biggest risks in a traditional sale is the deal falling through. The buyer’s mortgage approval gets denied. The appraisal comes in low. The home inspection turns up something the buyer will not accept. Or the buyer simply gets cold feet and backs out through a contingency.
When that happens, you go back to square one. You relist the home. You start the clock again. And every week back on the market makes the listing look more stale, which usually leads to lower offers the second time around.
I have seen sellers in Los Angeles go through this twice in one year. By the time they finally closed, months of extra mortgage payments and a second round of repairs had completely erased the price advantage they thought they had. A cash buyer would have closed that deal in two weeks and saved them tens of thousands of dollars in time alone.
Why a Cash Offer Is Often a Better Deal Than It Looks
A cash buyer does not need a bank’s permission to buy your home. There is no loan approval, no appraisal contingency, no lender pumping the brakes at the last minute. The offer is the offer. And if you accept, the sale typically closes in 7 to 21 days.
According to HomeLight, about 29% of homebuyers paid entirely with cash in October 2025, up from 27% the year before. Cash buyers are becoming more common, more competitive, and in many cases, smarter to work with.
The home is usually sold as-is. You skip the repairs, skip the staging, skip the open houses, and skip the waiting. There are no strangers walking through your home on a Sunday afternoon. No negotiating over a broken water heater or an aging roof. You get a clear number, a set closing date, and certainty.
Doing the Real Math on a Cash Offer vs a Listing
Let me put some real numbers to this so you can see how the math actually plays out.
Say your home is worth $700,000. A cash buyer offers you $630,000. On the surface, that is $70,000 less. But your net from a traditional listing after all the costs mentioned earlier might land around $615,000 to $636,000 in the best case. Your cash net? Likely $610,000 to $620,000 after minimal closing costs, with no repairs, no commission, and no risk.
The gap is not $70,000. It is closer to zero. And if the traditional sale hits any bumps, which it often does, the cash deal actually wins.
According to research from HomeLight, sellers who factor in commissions, concessions, repair credits, and carrying costs often find that the net difference between a cash offer and a financed sale is much smaller than the headline numbers suggest. In some situations, the cash deal nets more.
When a Cash Offer Makes the Most Sense in Los Angeles
Honestly, a cash sale is not the right move for every seller. If your home is freshly updated, in a hot neighborhood, and you are in zero rush, listing with an agent and letting the market compete can push your price above asking. That is a real thing that happens in LA.
But if your situation looks anything like the ones below, a cash offer is worth looking at very seriously.
- Your home needs significant repairs or updates that would cost more than the cash offer discount
- You are dealing with financial hardship, divorce, or probate and need to close on a set timeline
- You have already purchased another home and are carrying two mortgages
- Your home has been on the market and the listing is going stale
- You inherited the property and do not want to manage renovations from a distance
- You want the process to be simple and you need to move on with your life
If you are going through a difficult financial situation, a cash sale can be a real way out. Check out our post on selling your home during financial hardship in Los Angeles for more on how that process works.
What Sellers Get Wrong About the Net Proceeds Comparison
Most sellers make their decision by looking at the top-line offer number. That is a mistake. The number that actually matters is what you walk away with after everything is paid. That means factoring in every cost, every delay, and every risk before you decide which path to take.
A lot of sellers I have talked to in LA say the same thing after the fact: they wish someone had just laid out the real numbers for them before they spent three months and $15,000 trying to get full asking price for a home that had issues a cash buyer would have taken as-is.
How to Compare Offers the Right Way
When you get a cash offer, do not just look at the number. Sit down and calculate your actual net from both paths. Add up your expected commission, repairs, staging, and carrying costs for a traditional sale. Then compare that net to the cash offer minus any closing costs.
That comparison will almost always surprise you. The gap is smaller than most people expect. And once you factor in the time saved and the stress avoided, a lot of sellers would rather take the cash deal even if the numbers were equal.
If your home has fire or water damage, a traditional listing is going to be very difficult. Our post on how to sell a fire or water damaged home in Los Angeles walks through exactly why a cash buyer is often the only real option in those cases.
Questions to Ask Before You Accept or Reject a Cash Offer
Before you turn down a cash offer, ask yourself these things. What will repairs actually cost? How long is the home likely to sit on the market? How much are monthly carrying costs? What is the realistic chance a financed buyer falls through?
If you are not sure, get a real estimate from a contractor before you decide. A lot of sellers assume repairs will cost $5,000 and find out they cost $30,000. That changes the math completely.
Also, always ask the cash buyer for proof of funds. A real buyer will have no problem showing you documentation that the money is ready. If they hesitate on that, that is a red flag worth paying attention to.
For seniors thinking about downsizing, a cash sale takes a lot of the stress out of the equation. Our post on downsizing in Los Angeles through a cash sale covers what that process looks like in more detail.
And according to the National Association of Realtors, the median sale price for agent-assisted homes in 2025 was $425,000, compared to $360,000 for FSBO sales, which shows just how much the selling method and costs involved can shift what you actually end up with.
Conclusion
A lower cash offer is not automatically a bad deal. In fact, once you run the real numbers, it can be the better deal for your specific situation. The key is to stop looking at the top-line price and start looking at what you will actually take home after all the costs, delays, and risks are factored in.
If you want someone to walk through the real numbers with you at no cost, we are here to help. Just reach out through our contact us page and we will give you an honest comparison based on your actual situation.
Frequently Asked Questions
How much less do cash buyers typically offer compared to market value?
Most cash buyers offer somewhere between 75% and 90% of market value depending on the home’s condition, location, and how motivated they are. But once you subtract the costs of a traditional sale, including commission, repairs, and carrying costs, that gap often shrinks to just a few thousand dollars. For distressed or dated homes, the cash offer can actually net more.
What are the biggest hidden costs of listing a home with an agent?
The biggest ones are agent commission at 5% to 6%, pre-sale repairs, staging fees, and carrying costs like mortgage payments and insurance while the home sits on the market. On a $700,000 home in Los Angeles, these costs can easily add up to $60,000 or more before you close.
Do cash buyers buy homes as-is?
Yes. Most cash buyers purchase homes in their current condition. You do not need to fix, paint, clean, or stage anything. They come in, assess the home, make an offer based on what it is worth to them, and close. This saves sellers a significant amount of money and time upfront.
Can I negotiate a cash offer up?
Yes. Cash buyers expect some negotiation. Do not just accept the first number without asking for more or requesting they cover closing costs. A serious buyer will engage with a fair counter rather than walking away. The key is to back your counter with real data, like local comparable sales or contractor estimates for any issues they flagged.
How do I know if a cash offer is legitimate?
Always ask for proof of funds right away. A legitimate cash buyer will provide a bank statement or letter from a financial institution showing the money is available. Check online reviews and ask for references from past sellers. Get everything in writing before moving forward, and make sure there are no hidden fees buried in the purchase agreement.