Key Takeaways
- A listing price and a cash offer are not comparable numbers. Compare net proceeds, on a date you can actually plan around.
- Commission is the largest single deduction on a traditional sale and is commonly quoted at 5% to 6% of the sale price, split between both sides.
- Carrying costs are the deduction sellers forget: every month on the market is another mortgage payment, tax accrual and insurance premium.
- If your house is in good condition and you are not under time pressure, listing usually nets more. We will tell you that.
The Two Numbers People Compare Are Not Comparable
Almost every seller weighing a cash offer does the same arithmetic: an agent says the house might list for one number, we offer a lower number, and the gap looks like what the cash sale costs them. That comparison is wrong in both directions, and it is worth taking apart properly before you decide anything.
A listing price is an asking figure. It is what the house might sell for, after marketing, after a buyer is found and financed, after an inspection produces a list of demands, and after however many months that takes. A cash offer is a net figure on a date you choose. The honest comparison is what lands in your account, and when.
What Comes Off The Top Of A Traditional Sale
Four categories, in rough order of size.
Commission
The largest single deduction. Commission is negotiable and never set by law, but it is commonly quoted at 5% to 6% of the sale price covering both sides of the transaction. On a mid-priced Texas house that is comfortably the biggest line on the settlement statement.
Your Share Of Closing Costs
Title policy, escrow fees, recording, prorated property taxes and whatever the contract assigns to the seller. Individually small, collectively a percentage point or two.
Repairs And Buyer Concessions
This is the line sellers underestimate most, because it does not exist until an inspection creates it. A financed buyer with a report in hand will ask for the roof, the panel, the sewer scope or a credit in place of them. You can refuse, and sometimes the buyer walks and you start again with the report already written.
Carrying Costs
Everything you keep paying while the house is unsold: mortgage interest, property tax accrual, insurance, utilities and upkeep. Texas property taxes are high relative to much of the country, which makes each additional month on the market cost more here than the national conversation about carrying costs suggests.
- Reaches you
- Comes off the top
This is an illustration, not a market forecast. Each bar shows the composition of that route as a share of its own sale price, using commonly quoted ranges: 5.5% commission, 2% seller closing costs, 3% repairs and concessions, 2% carrying costs over a few months on market. The two bars deliberately do not share a dollar scale, because a listing price and a cash offer are different starting numbers. The point is that one route has deductions and the other has almost none, not that the bars are the same size. Your own figures will differ, and the table below breaks the deductions out.
View this chart as a table
| Route | Reaches you | Comes off the top |
|---|---|---|
| List with an agent | 87.5% | 12.5% |
| Sell to a cash buyer | 100% | 0% |
| Deduction | Commonly quoted | On a cash sale to us |
|---|---|---|
| Agent commission, both sides | 5% to 6% | None |
| Seller share of closing costs | 1% to 3% | We pay the standard costs |
| Repairs and buyer concessions | Varies; created by the inspection | None. We buy as-is |
| Carrying costs while listed | Per month, until it closes | Ends on your chosen date |
What The Cash Route Actually Costs You
Being fair about this cuts both ways. A cash offer starts below what the house would fetch fully repaired on the open market, and that discount is real. It exists because we take on the repair spend, the holding period, the property tax and insurance while we own it, and the risk that the resale is slower or weaker than we expected.
So the trade is straightforward: you give up some of the top-line number in exchange for certainty, a date you control, and none of the four deductions above. Whether that is a good trade depends entirely on your house and your circumstances, which is why we would rather you run the numbers than take our word for it.
How To Run Your Own Comparison In Twenty Minutes
- Get a retail valuation. Ask a local agent what the house would list for, and specifically what it would list for in its current condition versus after repairs. Those are two different numbers and you want both.
- Subtract commission at whatever rate the agent quotes you.
- Subtract your closing costs. The agent can estimate these.
- Subtract the repair list. If you already have quotes, use them. If not, assume a financed buyer will ask for the items an inspector always finds.
- Add up the carrying cost for the number of months the agent expects it to take, then add a couple more, because their estimate is an average and yours is a single house.
- Compare that net figure with a cash offer and ask yourself what the difference in certainty and timing is worth to you.
If the listing route wins on that arithmetic and you can wait, list it. That is the right answer for a lot of houses and we will say so on the phone.
When The Comparison Stops Being Close
The gap narrows sharply, and often reverses, in a few specific cases.
- The house will not pass a lender or insurer. Then the retail price is hypothetical, because the buyers who would pay it cannot get funded. See the repairs that actually stop a financed sale.
- You have a deadline you did not choose. A posted foreclosure date, a decree, a job start. Certainty is worth a great deal when the alternative has a cliff-edge. See facing foreclosure.
- You are carrying two housing costs. Every month of overlap comes straight off the listing route's net.
- The property is occupied by a tenant. Listing usually means a vacancy and a turnover first. See selling a rental with tenants still in it.
Ask Us For The Workings
When we give you a number, ask for the comparable sales we used and the repair figure we assumed. Both are checkable. If our repair estimate is wrong and you can show us why, say so, because sometimes it is wrong and the number moves. A buyer who will not show you the arithmetic is telling you something.
If you want the process itself rather than the math, how it works walks through it end to end.
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.
Sources
- Texas Real Estate Commission, Information About Brokerage Services — commission is negotiable and not set by law
- Consumer Financial Protection Bureau, closing costs explainer — what closing costs cover