Cash-rich homebuyers are securing the steepest discounts seen in years, widening the gap between what they pay and what financed buyers must offer to compete, according to a new analysis.
In 2025, sellers accepted an average 9% discount on all-cash purchases compared with financed offers, more than double the 4% gap recorded in 2021, according to the analysis from real estate data firm Cotality.
The shift reflects how much more sellers are willing to pay for certainty in a fragile market, where deals subject to financing approval and appraisals may be more likely to fall through.
As mortgage rates climbed after 2022, the share of pending sales that fell apart roughly doubled, from about 2% to 3% in the low-rate era to as high as 6% more recently, amid tighter credit conditions and growing insurance hurdles.
In disaster-prone states such as California and Florida, failed deals tied to insurance availability nearly doubled last year, amplifying sellers’ anxiety about transactions that depend on lender approval.
Cash offers strip away much of that risk. They typically waive financing and appraisal contingencies, often remove strict insurance requirements, and may come with fewer inspection demands, reducing the chances of a last-minute renegotiation or cancellation.
“Speed and certainty are the appeals of cash offers, and the reason sellers would take less for their home to get one,” says Realtor.com® senior economist Joel Berner. “As financed offers begin to fall through more often, the relative value of them drops and all-cash offers can compete at a lower price point.”
However, Cotality’s report suggests sellers may now be overpaying for the peace of mind that a cash offer brings.
At a median home price of about $410,000, a financed offer that falls through 6% of the time still has an expected value close to $390,000 once earnest money is considered, the firm calculates. By contrast, a cash deal discounted by 9% yields just $373,000.
The widening cash discount is reshaping who wins in today’s market. Investors account for around 36% of cash purchases, compared with 25% of financed ones, giving them outsized ability to capitalize on the growing price break.
With access to liquidity already skewed toward wealthier buyers and investors, each extra percentage point of discount effectively transfers more value to those who can avoid borrowing altogether.
Mortgaged buyers, meanwhile, are being pushed further into disadvantage. Roughly 80% of noninvestor buyers still rely on a home loan, Cotality notes, and they increasingly must bid higher just to stay in contention.
At the median price, compensating for the typical cash discount means that financed buyers typically have to bid $7,000 to $10,000 above the cash price, according to Cotality.
That’s contributed to affordability challenges that have pushed the share of first-time buyers to a record low of 21% of the market.
If the pattern holds, analysts warn, the market will continue to “reprice certainty” in ways that deepen affordability challenges and concentrate advantages among those with ready cash.
“What we know is that homes are spending longer on the market, so it could certainly be the case that the speed of a cash offer is its real selling point,” says Berner. “Sellers have waited around for offers for longer than they expected to, so if they can minimize the time to closing with a cash offer, they may jump on that.”