What is a Cash Sale?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 22 October 2019
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The term "cash sale" can be used in several different contexts. In just about every situation, a sale of this type has to do with the purchase of goods or services, and involves the immediate possession of the new owner, without any amount of time between purchase and assuming full ownership. People engage in cash sales on a daily basis, both in the world of finance and in retail situations.

One of the more common applications of the term has to do with investments. Within this context, a cash sale is a financial transaction that is completed on the actual trade date, rather than taking place after the usual three day period involved in most types of settlements. This type of sale allows the new owner to take immediate possession free and clear. This arrangement allows the investor to retain or sell the security immediately, without having to wait any amount of time.

In the event that the sale takes place late in the business day, the transaction can still be considered a cash sale and treated as if the actual purchase day and the trade date are the same. Generally, there will be no difference as long as the transaction takes place before 2:30 p.m. Eastern Standard Time. However, a cash sale conducted after that time will be completed and recorded for the following business day, and still be able to avoid the necessity of the three day settlement period.


In the case of purchases for the office or the home, cash sales are transactions that are immediately processed by the use of cash or a check. There is no situation of a deferred payment for the products that are purchased. Liquid assets are used to pay for the products in full, allowing the buyer to take immediate possession. The cash sale in this application could be the outright purchase of office equipment, a new television or computer for the home, or any other tangible item that is purchased for general use in the space.


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Post 4

Sunny27-I know that auctions fall under these categories when the auction is a judicial auction that is done on the courthouse steps.

These cash home sales are done quickly and the bidder has to provide the remainder of the winning bid by the end of the day.

Most of these bidders are seasoned investors that have access to funds by either cashing out the equity in another property or money that they have saved up through their real estate investing.

This type of cash sale is not recommended for a beginner because most of these homes have substantial liens that the winning bidder would be required to pay in order to get a clear title.


sponsored auctions like those done by REDC are better because the bank owns the property free and clear and they have cleared any liens on the property. With this type of sale you do not have to worry that you will be responible for any liens.
Post 3

Mutsy- This usually happens with resort properties. The way around this dilemma if you are interested in a second home with a low percentage of owner occupants or that has a high rate of foreclosures is to secure the mortgage with another property.

Many people might not be able to obtain a mortgage on the property, but they can get a home equity line of credit on their current residence especially if the home is paid off or has substantial equity.

Even though the financing is done as a second mortgage it is considered a cash sale because there is no mortgage on the property that you are buying. Furthermore, this arrangement usually results in minimal if any closing costs.

Post 2

Mutsy-I enjoy buying on EBay and know that most people would not have a problem selling on EBay, but it is true that not everyone wants to display their household goods in front of their home for everyone to see.

I know that people sometimes buying homes with cash. A cash house sale is not like it sounds. A cash home sale means that there is no financing on the property.

Sometimes this happens because the banks will not finance the property and offer a traditional mortgage.

This usually happens if the property has substantial code violations or the property is located in a complex with a high rate of foreclosures. In addition, a bank may not finance a property with a low percentage of owner occupants.

Post 1

Many people sell things in a quick cash sale. Usually household items and collectibles fall into this category.

Some people choose to have garage sales in which they liquidate their unwanted items on their front lawn while others prefer the online arena of EBay.

Both opportunities will offer cash quick and this is a great idea because you can use the extra money to invest or purchase household items that are more suitable.

I have really seen all kinds of things sold on EBay and it could be a more private way to sell off things that you no longer want or need. This works best for people that are uncomfortable displaying their items on the front lawn like that.

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