How to Minimize Closing Costs on Cash Purchase of a Property

Closing Costs on Cash Purchase

Buying a home is expensive, but having enough cash to make the purchase a reality can often seem impossible, and contemplating a home purchase? You’ve probably heard about closing costs on cash purchase. We assume you’ll want to keep those as low as possible, right?

Right. Closing costs can come in at up to 5% of your home’s purchase price, so they’re not precisely small changes.

In this blog post, we will discuss some practical strategies that you can use to avoid paying unnecessary closing costs when buying a home. Whether you’re a first-time homebuyer or an experienced real estate investor, this guide will provide valuable insights on saving money during home buying in Virginia

What Are Real Estate Closing Costs?

Closing costs are a collection of fees that must be paid by buyers and sellers when they finalize the purchase of a home. These fees are intended to cover the costs associated with the transaction’s legal, administrative, and financial aspects, such as appraisals, title searches, and loan origination fees.

At this point, buyers and sellers are typically subject to various closing costs and fees. These costs can include any payments from lenders, title companies, appraisers, and third parties for performing a service in finalizing the real estate transaction. Closing costs on cash purchase are typically a percentage of the home’s total purchase price, and they can range from two to six percent.

How much you’ll pay in closing costs depends on many factors. For sellers, it depends on agent commission and concessions; for buyers, it depends on the loan program, loan size, and individual lender policies and practices.

How To Avoid Closing Costs When Buying A House

Although cutting out closing costs outright is impossible, there are strategies to minimize costs through negotiation. An extensive amount falls on the buyer when examining who usually pays closing costs.

However, the buyer can negotiate so that some of the fees are reduced or assumed by the lender or shifted to the seller’s closing costs. Below, you will find some creative tactics on how to avoid closing costs on cash purchase as much as possible:

1. Negotiate A No-Closing Costs Mortgage

When looking at how to get closing costs waived, the best place to start is with your lender. In some cases, the buyer can negotiate a mortgage with no closing costs. However, remember that closing costs on cash purchase must be paid in one way or another.

In this case, the lender will typically raise the interest rate or bundle closing costs virginia into your mortgage’s total cost.

2. Negotiate With The Seller

Closing costs for sellers typically include commission fees, loan payoff costs, and transfer taxes, to name a few. In some cases, buyers can negotiate with the seller so that the seller pays closing costs instead.

Many loans will allow sellers to assume these costs in the form of a credit as a way for them to help seal a deal, and it is also a tax-deductible expense.

3. Comparison-Shop For Services

Many closing cost line items are service fees, such as title insurance, homeowners insurance, and home inspection companies. Buyers should quickly shop for loan products and service providers that offer competitive rates.

Your decision needs to be based totally on the person and consider, but keep in mind that mortgage phrases will vary among creditors, so you may also locate one that gives a clean gain. Lenders may have some particular prices tacked onto the mortgage estimate, so review every line carefully and ask questions if you’re unsure what the rate is supposed to be.

4. Negotiate Origination Fees With The Lender

When working with a lender, inquire about a fee reduction, waiver, or credit to offset some of your closing costs on cash purchase. When shopping for lenders, remember that they must provide a Loan estimate upon completing your mortgage application.

This step allows you to scrutinize the line items included in the closing costs on cash home purchase, such as application or attorney fees. However, be wary of scenarios where the lender will offset your closing costs by increasing your interest rate or bundling them into your total mortgage cost.

Finally, remember that some lenders offer loyalty programs for current customers, through which origination fees are reduced or waived.

5. Close Towards The End Of The Month

A home buyer becomes legally responsible for repaying their mortgage loan once their home purchase closes. If the loan closes mid-month, the buyer will typically make their first mortgage payment on the first of the following month.

In this case, per diem interest fees are assessed between the closing date and the first mortgage payment date. Buyers who close their home purchases to the end of the month as much as possible can minimize these per diem interest fees.

6. Look into Homebuyer Assistance Programs

Each state has homebuyer assistance loans that can provide down payment and closing cost assistance. Research your state’s qualified programs, and ask your lender about any local grants or programs you may qualify for.

In addition to state-specific programs, many government-backed loans, such as FHA loans, offer down payment and closing cost assistance for low to moderate-income first-time homebuyers, veterans or military service members, front-line workers, and other demographics.

With these types of loans, the closing costs on cash sale are often part of the loan and can be paid back gradually as part of the monthly mortgage payment.


In today’s competitive housing market, every dollar counts, and reducing your closing costs can mean the difference between being able to afford your dream home. By negotiating, comparing, and exploring your options, you can save thousands of dollars in closing costs on all cash home purchase and make the home-buying process more accessible and affordable. So, feel free to advocate for yourself, research, and use the available resources. With the right strategy and a little effort, you can achieve your homeownership goals while staying within your budget.

Don’t navigate the homebuying process alone! Reach out to HR Property Doctor to discuss any questions you may have.

Paul Johnson

Paul is a reputable local house-buying professional, also a real estate agent (Virginia). Count on his nearly fifteen (15) years of expertise in being part of resolving any issues that may threaten transactions, being accessible, and answering questions, as well as remaining transparent throughout closing transactions. One of Paul's Favorite Quotes: "To Give Anything Less Than Your Best Is To Sacrifice the Gift."

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