What Changes When You Buy With Cash

Roughly a third of what we close involves no lender at all. The process is genuinely simpler, but a few things change in ways worth knowing.

What disappears

• The loan policy. No lender, no lender's policy.
• Lender charges — origination, appraisal, underwriting
• The lender's timeline, which is what usually sets a 30-to-45 day closing. Cash purchases can close as fast as title work allows.
• Mortgage recording, and in Alabama, mortgage tax — which on a $240,000 loan would have been $360.

What changes in Alabama specifically

Deed tax works differently. On a financed purchase, Alabama charges deed tax on your equity. With no mortgage recording alongside the deed, it is charged on the full purchase price. A $300,000 cash purchase carries $300 of deed tax rather than the $60 a financed buyer would pay on the same house.

You still come out well ahead, because you avoid $360 of mortgage tax. But it is a rare case where financing produces a smaller tax line.

What does not change

The search, the examination, clearing exceptions, escrow, the settlement statement, recording. All of it happens exactly as it would with a lender.

The thing buyers skip, and shouldn't

The owner's policy. Without a lender requiring a loan policy, nobody in the transaction is insisting on title insurance at all — so cash buyers sometimes decline it to save a few hundred pounds.

That is the wrong economy. A cash buyer has more at stake than a financed one, because every dollar in the property is theirs. A defect that surfaces in five years falls entirely on them. The owner's policy is the only thing that stands in the way, and it is a one-time premium.

Note: general information for Pennsylvania and Alabama property owners, not legal or tax advice. Rates, taxes, eligibility and deadlines are set by statute and by each state’s filed rate schedules and can change. Confirm the specifics with us and with a qualified professional before relying on them for a transaction.