Before you accept a cash offer on your house — before you sign anything — there are eight questions you should ask the buyer. A legitimate buyer answers every one of them without hesitation. A predatory operator will not.
I am a cash home buyer. I have been purchasing homes in DFW and across the country for eight years. These are the exact questions I welcome from every seller I work with, because a seller who asks them is a seller who understands what they are entering — and that makes for a better transaction for everyone.
By Zareena Samidon | Samidon Realty Group | Colleyville, TX
Table of Contents
- Question 1: Which title company will handle the closing?
- Question 2: Can you provide proof of funds?
- Question 3: How much is the earnest money deposit — and where is it held?
- Question 4: What is your business model? How do you make money on this?
- Question 5: Can I take this contract to a real estate attorney before signing?
- Question 6: What happens if you back out after I sign?
- Question 7: What is your timeline, and what could delay closing?
- Question 8: Can I speak with a seller you've worked with before?
- What the Answers Tell You
- Frequently Asked Questions
Question 1: Which Title Company Will Handle the Closing?
This is the most important question on the list.
The title company is the independent third party that holds funds in escrow, conducts the title search, pays off existing liens, and distributes proceeds to the seller at closing. They are licensed by the state. They have fiduciary obligations to all parties in the transaction. Removing them from the equation removes the primary safeguard that protects you.
What a legitimate buyer says: They name a specific title company. You can look up that company's license, verify they operate in your state, and call them directly to confirm they have an existing relationship with the buyer.
What a problematic buyer says: "We use our own process," "we can save you money by skipping the title company," "our attorney handles both sides," or any variation that removes an independent third party from the closing.
What to do with the answer: Look up the named title company on your state's insurance commissioner website (title companies are regulated by the state department of insurance in most states). Verify their license is active. Call them and ask if they have worked with this buyer before.
Our answer: We close through a licensed Texas title company on every single transaction. Full stop. The title company name is in every written offer we make.
Question 2: Can You Provide Proof of Funds?
A cash buyer, by definition, has the funds to close. If they cannot demonstrate this, they are not a cash buyer — they are a contract holder who may or may not be able to find funding.
What a legitimate buyer provides: A recent bank statement showing liquid assets equal to or exceeding the purchase price, a hard money lender commitment letter, or documentation of an existing credit facility. They provide this quickly and without resistance.
What a problematic buyer does: Becomes evasive. "We have investors lined up," "our funding is not an issue," "we close hundreds of deals." None of these are proof of funds. Words are not proof of funds.
Why this matters: A buyer who cannot fund the transaction will eventually either back out — costing you time and potentially other opportunities — or attempt to use the inability to close as leverage to reduce the price below what you agreed to. Either outcome is bad for you.
Our answer: We can provide proof of funds on request before you sign anything.
Question 3: How Much Is the Earnest Money — and Where Is It Held?
Earnest money is the buyer's financial commitment that accompanies the purchase agreement. It is deposited with the title company and held in escrow. If the buyer backs out without a contractual basis for doing so, the earnest money is forfeited to the seller.
What a legitimate buyer offers: Earnest money between 1–5% of the purchase price, deposited with the title company within 1–3 business days of contract acceptance. On a $200,000 purchase, that is $2,000–$10,000 that is yours if the buyer walks away without cause.
What a problematic buyer offers: No earnest money ("it's not standard in our deals"), a token amount ($100–$500 that signals no real commitment), or earnest money held by themselves rather than an independent title company.
Why this matters: Earnest money is the buyer's skin in the game. A buyer with no earnest money on the table has no financial cost to walking away from the deal at any time — including after you have turned down other opportunities in reliance on their offer.
Our answer: We deposit earnest money with the title company. The amount is specified in every written offer.
Question 4: What Is Your Business Model? How Do You Make Money on This?
This question surprises some sellers. It should not. You are entering a transaction with a company that is making a profit from the purchase of your home. Understanding how that profit is made tells you whether the structure of the deal is what you have been told it is.
The two main models:
Direct purchase: The buyer purchases the property, renovates it, and resells it or holds it as a rental. Their margin comes from the difference between the purchase price plus renovation cost and the eventual resale or rental value. This is straightforward.
Wholesale/Assignment: The buyer contracts the property from you and then assigns that contract — the right to purchase — to another investor for a fee above what they agreed to pay you. The end buyer funds the actual purchase. The buyer you are dealing with earns an assignment fee.
Assignment is legal and common. The issue arises when it is not disclosed. In a properly structured assignment, the seller receives exactly what they agreed to, the title company manages the closing, and the assignment fee is funded by the end buyer above the contract price. The seller's proceeds are not affected. But if the assignment is not disclosed, and the buyer cannot find an end buyer, the deal may fall apart — leaving you without the sale you counted on.
Our answer: We explain our business model to every seller before they sign anything. We have done both direct purchases and assignments. In assignments, we disclose the structure fully, including the fact that an end buyer will be involved in closing.
Question 5: Can I Take This Contract to a Real Estate Attorney Before Signing?
The only acceptable answer to this question is yes.
What a legitimate buyer says: "Absolutely. Take your time. We can schedule closing whenever you're ready." They may give you a deadline — "the offer is valid for 48 hours" — but they will not object to attorney review within that window.
What a predatory operator says: "It's a standard contract," "an attorney will just complicate things and cost you money," "we need this signed today or the deal is off," or any variation that prevents you from getting independent advice before you sign.
A real estate attorney charges $150–$350 for a contract review in most markets. That investment is worthwhile before signing any major financial document. Any buyer who objects to this is a buyer who does not want you to have informed consent.
Our answer: Yes, always. We encourage it.
Question 6: What Happens If You Back Out After I Sign?
The purchase agreement governs what happens if either party exits before closing. You need to understand this before you sign.
What a seller-protective contract says: The buyer can exit only under specific conditions specified in the contract — a title issue that cannot be resolved, a specific inspection discovery that exceeds a specified threshold, or mutual agreement. If the buyer exits without one of these conditions being met, the earnest money is forfeited to the seller.
What a buyer-protective contract says: The buyer can exit for any reason during an option period, or for vaguely defined conditions, with earnest money returned to the buyer regardless of the reason for exit.
What you are looking for: A contract that specifies clearly what conditions allow the buyer to exit and whether earnest money is forfeited if they exit without those conditions being met. If the contract allows the buyer to walk away and take their earnest money with them for any reason, you bear all the risk of the deal falling apart.
Our answer: Our contracts specify the conditions under which either party can exit and the earnest money consequences of each scenario. We walk sellers through this language before signing.
Question 7: What Is Your Timeline, and What Could Delay Closing?
The close date in the purchase agreement is a target. Understanding what could move it gives you a realistic picture of your timeline.
What can delay a cash closing:
- Title issues: A lien, delinquent tax, or ownership complication that requires resolution before title can transfer. These add days to weeks depending on complexity.
- Seller documentation: If the property is in a trust, in probate, or held by multiple co-owners, documentation requirements can extend the timeline.
- Buyer's internal process: Some buyers — particularly larger companies or wholesalers waiting to place an end buyer — have internal timelines that affect closing speed.
- End-of-month volume: Title companies are busiest at month-end. Closings scheduled for the last week of the month sometimes slip to the first days of the following month.
What a legitimate buyer tells you: The realistic timeline given the property's specific situation, what they have found so far that could affect it, and how they have handled similar delays in past transactions.
Our answer: 20–30 days is our standard DFW cash close timeline. We communicate proactively when anything affects the timeline and explain what we are doing to resolve it.
Question 8: Can I Speak With a Seller You've Worked With Before?
References are standard in any professional services context. A cash home buyer who has closed dozens or hundreds of transactions has sellers who can speak to the experience.
What a legitimate buyer does: Provides references. They may ask the references for permission first, which is reasonable. But they can produce names, phone numbers, or written testimonials from sellers they have worked with.
What a problematic buyer does: Cannot produce references, offers testimonials that cannot be independently verified, or provides references who turn out not to exist.
What references to ask about: Did the deal close on the agreed date? Was the seller surprised by any last-minute price change or fee? Did the buyer communicate clearly throughout the process? Would they work with this buyer again?
Our answer: We can provide references from sellers we have worked with. Our case studies on this site — the prison heir probate, the squatter fire deal, the Mississippi closing that required an attorney letter — are documented real transactions that sellers can ask us about directly.
What the Answers Tell You
A legitimate cash buyer passes all eight of these questions. Their answers are specific, immediate, and verifiable. They welcome the scrutiny because their process can withstand it.
A predatory operator will fail at least one — typically the title company question (no independent closer), the earnest money question (too low, or held by themselves), or the attorney question (resistance to review).
A single failed answer is a red flag. Multiple failed answers are a reason to walk away entirely.
The sellers who have the worst outcomes with cash buyers are the ones who signed quickly because the offer felt good and the buyer seemed trustworthy. Trustworthiness is demonstrated by the answers to these questions — not by how the buyer presents in a first conversation.
Take the time. Ask the questions. Verify the answers. Then decide.
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Frequently Asked Questions
What should I ask before accepting a cash offer on my house?
Ask the buyer: which title company will handle the closing (and verify them independently), whether they can provide proof of funds, how much earnest money they are depositing and where it is held, what their business model is, whether you can take the contract to an attorney before signing, what happens if they back out, what could delay the closing, and whether they can provide seller references. A legitimate buyer answers all of these questions without resistance.
How do I know if a cash offer on my house is legitimate?
A legitimate cash offer comes with a written purchase agreement, specifies a named title company, includes earnest money deposited with an independent holder, and is made by a buyer who can demonstrate proof of funds. The buyer will allow attorney review before signing and can provide seller references. Any offer that bypasses these elements — particularly the title company — deserves additional scrutiny.
What is a fair earnest money amount for a cash home sale?
In a legitimate cash home purchase, earnest money typically ranges from 1–5% of the purchase price, deposited with the title company within 1–3 business days of contract acceptance. On a $200,000 purchase, that is $2,000–$10,000. Lower amounts (under $500) suggest a buyer who is not committed to closing. Earnest money held by the buyer themselves rather than an independent title company provides no real protection.
Do I need a real estate attorney to sell my house to a cash buyer?
You are not legally required to hire an attorney, but having one review the purchase agreement before you sign is a worthwhile investment — typically $150–$350 for a contract review in most markets. A real estate attorney can flag contract language that heavily favors the buyer, explain the terms of the earnest money provisions, and advise on any title or ownership issues affecting the sale. Any cash buyer who objects to attorney review should be treated with significant skepticism.
Can a cash home buyer back out after I accept their offer?
Yes — but the terms of the purchase agreement govern the financial consequences. A well-drafted purchase agreement specifies the conditions under which the buyer can exit (title issues, specific inspection findings) and states that the earnest money is forfeited to the seller if the buyer exits without a contractual basis. Before signing, confirm you understand: what conditions allow the buyer to exit, whether earnest money is returned or forfeited in each scenario, and what your options are if the buyer exits without cause.
Related: Are Cash Home Buyers Legitimate? · How Does Selling a House for Cash Work? · What Is a Fair Cash Offer? · 1 in 4 Titles Has a Problem · Seller Refused to Sign on Closing Day