Why Having Hard Cash Isn’t Always a Good Thing When Buying a Home

You might think that showing up with stacks of cash to buy a house would make you the ultimate buyer—but in real estate, having “hard cash” (actual physical currency or untraceable funds) can actually hurt your chances of getting the deal done.

Here’s why cash needs to be more than just green bills when it comes to buying property in today’s market.

1. No Paper Trail = Red Flags

Every real estate transaction requires a clear and legal paper trail. When you bring physical cash to the table, it raises more questions than answers.

Escrow companies, lenders, and title offices are legally obligated to verify the source of funds due to anti-money laundering laws. Without documentation showing where your money came from, the deal could be delayed or even fall apart.

2. Large Cash Deposits Trigger Bank Scrutiny

Let’s say you try to deposit a large amount of cash right before buying a home. Sounds simple, right? Not quite.

Banks are required to report cash deposits over $10,000 and may hold or freeze funds temporarily until you provide documentation. This could delay your ability to close on time, or worse make sellers lose confidence in your offer.

3. It Could Scare Off Sellers

If you tell a seller you’re a “cash buyer,” they’ll expect a proof of funds letter from a bank or financial institution.

Showing up without one or worse, trying to pay with actual physical cash makes you seem unreliable or even suspicious. In today’s competitive market, that could cost you the deal.

4. Tax and Legal Complications

Using hard cash can open the door to unwanted attention from the IRS. Real estate is one of the most heavily regulated industries when it comes to financial transparency. Trying to slide through with undocumented cash could lead to:

• Audits

• Fines

• Potential legal trouble

It’s simply not worth the risk.

5. The Right Way to Be a Cash Buyer

If you have the money, great—you’re in a strong position. Just make sure your funds are:

• In a verifiable bank or brokerage account

• Seasoned (ideally sitting in the account for at least 60-90 days)

• Ready to be documented with a formal Proof of Funds letter

This way, your cash status becomes a strength—not a liability.

In real estate, cash is king but only if it’s traceable and verifiable. If you’re planning to buy a home using cash, make sure it’s where it belongs in the bank and ready to move when escrow calls.

Have questions about buying with cash or preparing financially for your next real estate move?
Reach out to me anytime — I’m here to guide you through every step.

📞 Yervant Bekarian
📍 Realtor – JohnHart Real Estate
📲 818-633-5501