A cash offer is not proof of cash. This is the thing that catches people. Anyone can put a number on a piece of paper. Having the money, and having it accessible on the day you agreed to, is a different question entirely.
When a cash offer arrives on a house I am representing, here is what I ask before we respond, in order.
START WITH THE FUNDING
- Where is the money coming from? A hard money lender, private capital, their own funds, a partner. There is no wrong answer, but there should be an answer.
- Is anyone else involved in the decision? A partner, a spouse, an investment committee. If the person in front of you cannot sign, you need to know now.
- Can you show proof of funds? An offer is a sentence. Proof of funds is a document, in the buyer’s name or the entity’s name, and a real buyer expects to be asked.
- Have you closed a purchase recently? People who buy houses do it regularly. Ask for the date and the city.
THEN THE TERMS THAT ACTUALLY MATTER
- What is the earnest money deposit? Small deposits are cheap to walk away from, and that is exactly the risk you are being asked to accept.
- What are the contingencies? A cash offer with a fifteen day inspection period is not the same product as one without.
- Who pays which closing costs? Get this in writing. It is dull and it is thousands of dollars.
- Can I read the purchase agreement before the day I sign? A buyer who resists you reading the contract in advance is telling you something useful.
THEN THE QUESTIONS ABOUT THEM, NOT THE HOUSE
Ask how long they have been buying houses and whether they will give a reference from a seller they bought from. Ask whether they use a title company or escrow holder you can call yourself. These are easy for a real buyer to answer and awkward for someone who is improvising.
AND THE ONE YOU SHOULD NOT SKIP
Ask what happens if the house turns out worse than they thought, or the title has a problem, or the walkthrough turns up something nobody mentioned. The honest answer is that the offer may change, and you want to hear that before it happens rather than after you have packed.
WHERE I COME IN
As your agent, I can read the agreement with you, ask these questions for you, and set a cash offer beside what the same house would likely net on the open market. I will tell you plainly when the cash offer is the better deal and when it is not. Brokerage compensation is negotiated and agreed in writing before anything is signed, and I will show you how it changes your net either way.
I also run a separate business, Lucano Buys Houses, that buys houses directly. If you are weighing a direct offer from me, every question above applies to it too. Written terms, proof of funds, a title company you can call and the right to say no are not optional on my side either.
Question for you: what would you need to see before you felt comfortable signing? If the answer is a call with the buyer’s lender and a reference, that is a reasonable ask, and a real buyer will make it happen.
