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  • Writer's pictureMark Buskuhl

Selling Your Home to Cash Buyers: 6 Important Rules to Follow

Updated: May 18, 2023

The world of real estate investment and cash buying is fraught with danger, as many inexperienced individuals and small companies often masquerade as seasoned professionals.

They may have no prior experience in the field and may use dishonest tactics to take advantage of unsuspecting homeowners.

Adding to the problem is the fact that the industry remains largely unregulated, meaning that anyone can claim to be a real estate investor or cash buyer with no formal licensing requirements in Texas.

Therefore, it is crucial for homeowners to educate themselves and stay vigilant to avoid falling prey to scams.

By following the six vital rules for selling to cash house buyers, you can protect yourself from unscrupulous individuals and companies.

Ask for Proof of Funds

It is imperative not to overlook the importance of verifying a cash buyer's financial capabilities when selling your home to a "we buy houses" company.

Although this may sound like a straightforward task, it is a common mistake that home sellers make. The most crucial step you can take is to ask for proof of funds from the cash house buyer.

Legitimate real estate investors have cash reserves, and they are not hesitant to demonstrate their financial ability to purchase your property. It would be best if you only accepted proof of funds in the form of a bank statement or line of credit letter from the bank.

If the cash buyer is slow to provide proof of funds or reluctant to provide it altogether, it is highly likely that they don't have the money to buy your home. As a result, they may not be able to close the sale of the property, leading to a wasted opportunity for you.

Therefore, it is crucial never to make an exception to this rule.

Never Allow for an Inspection or Option Period

It is a common misconception that a third-party inspection or an "option" period is necessary for a we buy houses company or professional real estate investor to decide whether or not they want to purchase your home.

Legitimate real estate investors are experts who know what to look for and can identify any issues that may need to be addressed without the help of a contractor or inspector.

In Texas, an "option" period refers to the period of time during which a buyer can back out of a contract for any reason or no reason at all. However, it is not a requirement for a legitimate cash buyer or real estate investor.

If a buyer is asking for an option or inspection period, it is a red flag and indicates that you may be dealing with an inexperienced or amateur buyer who has no intention of closing on the sale of your house. They may be trying to assign the contract to someone else instead.

As a seller, it is important to be wary of such buyers and to work with only legitimate and experienced real estate investors who can confidently make a purchase offer without requiring any inspection or option period.

Contact Us Ninebird Properties

Watch Out for “And or Assigns”, “Assignment” or “May Assign”

It is essential to carefully examine any real estate contract and search for the term "assign" or any variations of it. If this language appears in the agreement, the buyer may not intend to purchase the house, but rather assign the contract to another person or company.

Unfortunately, this is a common strategy employed by fake real estate investors who do not possess the funds to buy a home.

Instead of buying the property, they will assign their contract rights to another party for a higher price or fee than what was agreed upon with you, the seller. This enables them to profit from the transaction without actually purchasing the home.

This technique is usually coupled with an option period, during which the fake cash buyer will seek someone to whom they can assign the contract. If they are unable to locate anyone, they may terminate the agreement with no consequences.

Imagine it's closing day, you've moved out of the property, and suddenly the buyer backs out, leaving you in a difficult situation.

To safeguard yourself further, you may want to request language in the contract that explicitly forbids the contract from being assigned.

The rule of law can be vague in this area, with some lawyers arguing that if the contract doesn't state that you can't assign it, then you can.

It's always wise to close any contract loopholes and collaborate with a professional real estate cash buyer to avoid unpleasant surprises on closing day.

We Buy Houses

Earnest Money Deposit

Verifying the authenticity of a cash house buyer or real estate investor is crucial when selling your home.

One simple way to ensure that the buyer is committed to closing the deal is by requiring an earnest money deposit of at least $5000. Legitimate buyers should have no problem putting down this amount, which will be credited towards the purchase price at closing.

If a cash buyer offers less than $5000, it may be wise to request an increase in the deposit amount to confirm their seriousness about the transaction.

Closing Date of 30 days or Less

Legitimate cash buyers and real estate investors are typically able to close a deal within 2-3 weeks if you want to sell your house fast. However, if there are any title issues, inheritance documents that need to be finalized, or delays in obtaining a loan payoff, the closing may need to be extended.

Be wary of buyers who request longer closing dates, as this may be a sign of an unprofessional or fake real estate investor who is attempting to assign the contract to another party.

Contact Us Ninebird Properties

Texas Real Estate Commission (TREC) Contract

The Texas Real Estate Commission (TREC) is the state agency responsible for licensing real estate agents and providing state-endorsed forms for buying and selling property.

Even though a real estate investor is not obligated to hold a license, it is recommended that they use the appropriate TREC contract for their transactions.

The TREC contract offers protection to both the buyer and seller and is widely considered as the standard for real estate deals in Texas.

Additional buyer-made addendums are unnecessary and can be one-sided, favoring the buyer over the seller.

If you are asked to sign any document other than a TREC contract or addendum, it's recommended to have an attorney review it before signing.


By adhering to these six guidelines, you can ensure a successful and stress-free closing when selling your home to cash buyers. Always request proof of funds, avoid allowing for an inspection or option period, be cautious of assignment language, insist on an earnest money deposit of at least $5000, and use a TREC contract. Selling to cash buyers is a popular and hassle-free approach to selling your house.

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