How to Choose a Cash Home Buyer You Can Trust

If you've put your address into a "we buy houses" website or gotten a postcard in the mail, you already know there are a lot of cash buyers in Houston. Most are legitimate. A few aren't, and the ones that aren't can cost you time, money, or even your equity. Here's how to tell the difference.

Questions to ask any cash buyer

"Which title company will we close with?"

Every legitimate sale should close at a licensed Texas title company. The title company checks ownership, pays off your loans and liens, collects the buyer's money, and records the deed. Look the title company up yourself and call their main number rather than one the buyer gives you. Never sign a deed outside a title company.

"Can you show proof of funds?"

A buyer paying cash should be able to show a bank statement or a letter from their lender or funding source. You don't need their account number, just confidence the money exists.

"How much earnest money will you deposit, and when?"

Earnest money is deposited with the title company when the contract is signed, and it shows the buyer is committed. Watch for contracts with a tiny deposit and a long option period. They let a buyer tie up your house with little risk to them.

"What could change the price after we sign?"

Some buyers make a high offer to win the contract, then renegotiate after an "inspection." A trustworthy buyer walks the property before making a firm offer and tells you up front what, if anything, could change it.

"Who pays the closing costs?"

Get it in writing. Many cash buyers pay the normal seller closing costs. Make sure the contract says so.

Red flags

• Any upfront fee to make an offer, to "reserve" your sale, or for an appraisal or application. You shouldn't pay a buyer anything.
• Pressure to sign today before you've had time to read the contract or ask questions.
• Asking you to sign over the deed, or to let them "take over your payments," without a proper closing. These arrangements can leave the loan in your name while you lose the house.
• No real local presence. No phone number that reaches a person, no address, no reviews, no names.
• Vague contracts. Blank spaces, missing closing dates, or terms that let them delay closing indefinitely.

Signs you're dealing with a good buyer

• They walk the house or ask detailed questions before making a firm offer
• They explain how they got to their number
• They close through a reputable title company you can verify
• They give you time to review the contract, and encourage you to have someone else look at it
• They tell you when listing with an agent would get you more money

We welcome all of these questions. You'll deal directly with us, Andrickson and Jasmin, from the first call through closing at the title company. If you're comparing buyers, call and ask us anything on this list.