What Is a Real Estate Cash Contract?

A real estate cash contract is a contract between the seller and the buyer. In this contract, the buyer pays the seller a percentage of the home purchase. The seller acts as the legal liaison for the entire process in place of the bank.

Seller as Bank

Within this contract, the seller can lend any amount up to the property's purchase price to the buyer. This loan is a legally binding mortgage with the same rules and penalties as one received from a bank.

Credit Check

Within a real estate cash contract, your credit record will not be retrieved, and you will not have to wait for a qualification. This only applies, however, if this cash contract is completely owner-financed.

Lease Purchase

A real estate cash contract is not the same as a lease-purchase option. With this contract, you do not have to rent the property for a period of time before you have the option to buy.

Closing Costs

Closing costs within a real estate cash contract are substantially less than other home purchases. The reason for this is that a real estate agent is not required for this contract and so you are only paying attorney fees for this closing.


The seller has the right to foreclose on the property if the buyer is delinquent in payments. The process is the same and has the same repercussions on the buyer's credit if this property were purchased through the bank.