Should I Accept a Cash Offer for My House?

If you are weighing a cash offer, you are probably under some pressure already. There is no wrong answer here, only the one that fits your situation. These are the questions that help you see it clearly.

What a cash buyer is offering you

Speed. No mortgage approval to wait on.
As-is. You usually don't repair or clean out the house.
Often more certainty. There is no buyer's loan that can fall through, though any buyer can still back out under the terms of the contract.

What you give up

Price. The buyer pays for repairs, carries the costs while the work is done, and takes the risk of reselling, so the offer is usually below what a fixed-up house would list for.
Some time to shop. The faster you sign, the fewer offers you see.

How to compare

Use our cash offer calculator to see what you would walk away with from the offer, and roughly what you'd have after listing it instead. Then get at least one more offer. Each buyer is pricing the same house, and comparing them tells you where the market really is.

Questions to ask any buyer

Will you put the offer, and every promise, in writing?
Which title company or real estate attorney will handle the closing?
Can you show proof of funds?
Are you buying the house yourself, or signing a contract you plan to assign to another buyer? This is legal in many states, though some regulate it or require disclosure. Either way, you should know which.
How much earnest money will you deposit, and when?
What could make you back out or lower the price after we sign?

When to slow down

Someone asks you for money up front.
Someone asks you to sign over your deed before you are paid at closing.
Someone tells you the offer is only good today.
Someone offers to "take over your payments" while the loan stays in your name. Some of these deals are legitimate, but the risk stays with you, so have a lawyer review it first.

If any of those happen, read how to spot foreclosure rescue scams, and call a free HUD-approved housing counselor at 1-800-569-4287 if you are behind on payments or taxes.

Frequently asked questions

Is a cash offer usually lower than listing?

Usually, because the buyer takes on the repairs, holding costs and resale risk. In return you get speed, no repairs and fewer deals that fall through.

How do I know if a cash offer is fair?

Compare it. Use a calculator to see what you would walk away with, and get at least one more offer for the same house.

Is it a red flag if a buyer wants to assign the contract?

Not by itself, it is a common practice, legal in many states, though some regulate it or require disclosure. You should simply know whether the person signing will actually be the one who buys.

Should I ever pay a buyer anything?

No. A buyer pays you. Never pay an upfront fee, and never sign over your deed before you are paid at closing.

Does Orrindale buy houses or charge me anything?

No. Orrindale is free to homeowners and we are not a buyer. If we have local buyers working in your county we will introduce you, you choose who to talk to, and you are never under any obligation. If we do not, we will still point you to free help.

Sources

Compare offers from local buyers, free

This page is general information, not legal or tax advice. For your specific situation, consult a licensed attorney in your state or the relevant agency. Orrindale is a matching service, not a law firm, lender, or government program.