How To Read A Cash Offer Before You Sign It

The Number Is The Least Informative Part

When two cash offers arrive, most sellers compare the price and pick the higher one. That is reasonable and it is often wrong, because a cash offer is a set of terms and the price is only meaningful if the terms mean the buyer will actually close at it.

The uncomfortable truth about this corner of the market is that a headline number costs a buyer nothing to write down. What costs them something is committed earnest money, a short option period, and no route to walk away. Read for those.

The Seven Things To Check

1. The Assignment Clause, Which Is The Real Test

An assignment clause lets the buyer transfer the contract to a third party. It is how wholesaling works: a buyer ties up your house under contract, then markets that contract to actual investors for more than they agreed with you, and the difference is their fee.

This is legal, and it is not automatically against your interest. What is against your interest is not knowing. If the person in front of you does not intend to buy your house, then the price they wrote down is a hope rather than a commitment, and if they cannot find a buyer they simply walk at the end of the option period. Meanwhile your house has been off the market.

Ask directly: "Are you buying this yourself, or assigning the contract?" A straightforward buyer answers in one sentence. If the answer is evasive, that is the answer.

2. Earnest Money Is The Only Real Signal

There is no statutory earnest money figure in Texas and no standard percentage, so the useful questions are not about the amount. They are: is it deposited with the title company, and under what circumstances is it refundable?

Money the buyer holds is not earnest money, it is a promise. Money that is refundable for any reason at the buyer's discretion is also a promise. A buyer who puts real funds at genuine risk has told you something no wording can fake.

3. The Option Period Is Time You Are Giving Away

An option or inspection period is a paid right for the buyer to terminate. It exists for good reasons in a normal financed sale, where an inspection may reveal something nobody knew.

In a cash sale where the buyer has already walked the property, a long option period is harder to justify. During it your house is off the market, you cannot accept a better offer without risk, and the buyer can leave. Ask what they need the time for. If the answer is "to line up a buyer", see the assignment section above.

4 And 5. The Date, And Whether The Money Exists

A closing date should be a date. "On or before" with an unlimited right to extend is not a date, it is an option. If you need a specific day because of a job, a court order or a foreclosure posting, that date belongs in the contract with consequences attached, not in an email.

On proof of funds: asking is normal and not rude. A genuine cash buyer expects it. A bank statement or a letter from a lender showing the funds available is the standard, and a document dated many months ago tells you little. We would rather you asked us than assumed.

7. The Clause That Does The Most Damage

The single most common complaint about cash buyers in this industry is the post-contract price reduction: an attractive number gets you to sign, then after an inspection the buyer discovers problems and lowers the offer, by which point you have lost weeks and other buyers have gone.

The structural protection is simple. A buyer should look at the house before giving you a number. If they have seen it and their offer still contains a right to renegotiate on condition, ask what that is for. Hold us to this too: we look first, then give a figure, and if we have got the repair estimate wrong that is our problem and not a reason to reduce your price.

Questions Worth Asking Out Loud

• "Are you buying this yourself or assigning it?"
• "How much earnest money, and who holds it?"
• "What do you need an option period for?"
• "Can you show me the comparable sales you used?"
• "What did you allow for repairs?" Then compare it with a real quote.
• "Which closing costs am I paying?"
• "What would make you not close?"

The last one is the most revealing question you can ask any buyer, and the answer tells you how much the price on the page is worth.

Two Things That Are Not Red Flags

A cash offer being below what an agent would list the house for is not evidence of a bad buyer. It reflects that the buyer takes on the repairs, the holding period and the resale risk, and the honest comparison is net proceeds on a certain date. See what you actually keep.

A buyer needing time for title work is also not a red flag, it is realism. Payoffs, releases and heirship documents take as long as they take. That is a title timeline, not an option period, and the difference matters. Title problems that delay a Texas sale covers it.

Before You Sign Anything

Read the whole document, not the summary. Ask a Texas real estate attorney to look at it if the sum matters to you, which it almost certainly does. And if you are under time pressure from a foreclosure posting or a court date, say so to the buyer explicitly, because a buyer who is genuinely closing will work to it and a buyer who is not will become vague.

If your situation has a deadline, facing foreclosure and the Texas foreclosure timeline set out how much room you actually have.

This is general information, not legal, tax or financial advice. Texas procedure turns on the specific documents in your file and the dates on them. For anything involving a court, an estate, a lender or a taxing authority, talk to a Texas attorney or a HUD-approved housing counselor as well as to us.