Cash to Close

What It Means

Cash to close is the total sum of money that buyers must deliver at closing to complete a real estate purchase. It includes the Down Payment, Closing Costs, prepaid items (such as property taxes, homeowners insurance, and prepaid interest), and any other fees due at settlement — minus credits such as earnest money deposits already submitted and any seller concessions.

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In a co-buying arrangement, the cash to close figure is typically divided among the co-buyers, with each party's contribution clearly defined, funded, and documented before the closing date.

How Cash to Close Works for Co-buyers

The lender provides a Closing Disclosure at least three business days before closing, which itemizes the exact cash to close amount. For co-buyers, this figure must be broken down by party: who pays what portion, from which accounts, and how each contribution is classified — as a Capital Contribution, a loan between co-buyers, or another arrangement.

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Funds typically must come from verified accounts. If a co-buyer receives assistance from a family member, a Gift Letter may be required. Wire transfers from multiple accounts to the Escrow agent must be coordinated carefully — title companies and escrow agents often have specific requirements for how funds from multiple parties are received.

Why It Matters for Co-owners

Cash to close is frequently larger than co-buyers expect, because it includes costs beyond the down payment. When the total exceeds what the group budgeted, co-buyers must decide quickly how to cover the shortfall — and whether any adjusted contributions change Ownership Share percentages or Equity allocation.

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The Co-ownership Agreement should document each co-buyer's cash to close contribution and specify whether closing cost contributions are treated the same as down payment contributions for equity and exit calculation purposes.

Key Points

• The total amount due at closing: down payment, closing costs, prepaids, and fees minus credits
• Each co-buyer's contribution is typically defined, sourced, and documented before closing
• Multiple funding sources require coordination with the escrow or title agent
• Often exceeds the down payment alone — co-buyers should budget for the full figure
• Last-minute shortfalls require quick decisions about adjusted contributions
• The Co-ownership Agreement should define how each party's closing contributions affect ownership and equity