Wanna Sell Your House to a Cash Buyer? Here Are The Pros and Cons!

A red "For sale" sign with a yellow "Sold" band and a beautiful house in the background

So, you want to sell your home in Texas and aren’t sure whether you should go through a real estate agent or accept a cash offer. While there isn’t a right or wrong way for homeowners to proceed, they should know the pros and cons of a cash offer. Typically, a traditional home sale through a realtor will take longer and more headaches.

However, an all-cash offer usually entails accepting less money, but the process is less of a hassle. Before you decide which way to go, consider the advantages and disadvantages of working with a cash buyer. You’ll also want to look at the local housing market and whether you can wait or need a faster closing. 

Let’s examine the downsides and benefits of accepting cash offer.

Important Things to Know About Texas Cash Home Buyers

Buyers willing to pay cash for a Texas home can be a wholesaler, an investor, a real estate agent, or an instant buyer platform like Zillow. However, you might also come across a traditional homebuyer who can afford to pay cash. They don’t need a mortgage lender because they have enough savings or proceeds from another home sale to present a cash offer.

Generally, cash home buyers in Texas are going to submit a lower offer than the home’s market value. Investors, instant buyer platforms like Redfin, and wholesalers are willing to take on as-is properties. They’re also okay with fixing up distressed homes and flipping or renting them for a profit. To do this, cash buyers have to offer less than the home value to pay for renovations.

Homes in Texas that buyers place a cash offer on may have foundation problems, need roof repairs, or require new HVAC equipment. These are not cheap renovations or repairs, and a cash buyer still has to pay for closing costs in a seller’s market. Typical cash buyers in Texas will likely pay up to 70% of the property’s market value.

As you can see, the pros and cons of a cash offer on a house can determine your decision.

The Benefits of Working With Cash Home Buyers in Texas

Whether you need to sell a house fast in Dallas or Houston, working with a cash buyer means you don’t have to wait for your buyer to go through escrow or underwriting. As long as the buyer has proof of funds, a cash transaction can go through in as little as 7 days. In some cases, you won’t have to deal with an inspection contingency or a home inspection.

An instant buyer platform will move forward with a cash deal after a walk-through of your property. You’ll get a firm cash offer and can either decline or accept. If you accept, you can skip the contingencies that come with a mortgage loan and be on your way to a new home in no time.

A Texas home sale takes an average of 86 days to close. This includes time on the market, underwriting, and the negotiation process. But a cash sale dramatically shortens this time and provides homeowners with a faster closing. You don’t have to make repairs, deal with showings, or adjust your sale price in buyer’s markets.

Pros of Working With Cash Home Buyers

A young couple shaking hands after selling their house to a cash buyer

The pros of selling a house without a realtor include lower costs and fewer headaches. A typical real estate transaction involves:

  • The hassle of showings and open houses with strangers going in and out. You must rearrange your schedule and stay away from your home during showings and open houses. This can be inconvenient if you have kids, pets, and nowhere else to go.
  • Listing the property on the MLS and waiting for showing requests and a qualified buyer to make an offer.
  • Evaluating one or multiple offers if there’s a bidding war.
  • Contingencies, such as a home inspection, the buyer’s credit score, loan approval, and home sales for existing homeowners.
  • Changes in real estate market conditions, including interest rate fluctuations.
  • Title insurance and other closing paperwork.

Many of these inconveniences don’t exist with a cash purchase. Even if your buyer doesn’t want to waive the inspection contingency, the home selling process is much faster. You don’t have to get out of your home for showings. No more coming home to raised toilet seats or open closet doors.

You maintain more of your privacy, especially with real estate investors. You also don’t have to pay real estate commissions. There’s no asking price to set, adjust, or negotiate. And in most cases, you won’t be dealing with a first-time home buyer who may be more picky or anxious about the idea of homeownership. 

Cons of Working With Cash Home Buyers

In a competitive market that favors sellers, working with a cash buyer means you may get less for your home. 

On average, cash offers are 12% less than financed offers. You might be leaving money on the table, even with no contingencies or agent commissions. And while some sellers might prefer a quick closing, it’s not the most convenient for everyone.

Say you’re selling and buying a home at the same time. You need time to find a new home, make an offer, and figure out your new mortgage payment. Closing on your existing home in a week means you’ll be technically homeless until you get possession of a replacement property. Putting your belongings in storage and moving them twice can be expensive.

Plus, the liquidity of cash and financed offers doesn’t change on the seller’s end. You get a check from the title company regardless of where the money comes from. Ideally, you close on your existing property and new home loan on the same day. This lets you move your belongings one time, apply your proceeds to your new property or loan, and gain possession at once.

Talk to any home seller who’s bought and sold at the same time and they’ll tell you how stressful it is. A cash sale may be more of a done deal, but it’s not without some downsides. You may also encounter less than ethical buyers and real estate practices, such as buying a home for less and then selling it quickly for 5% to 10% more.

Should You Sell Your House to Cash Home Buyers

Whether you find a cash buyer by searching for terms like we buy houses Arlington or through online platforms, the decision depends on your most pressing needs. Here are some questions to ask.

  • How fast do I need to sell? Am I just selling an existing property or do I also need to find a replacement home?
  • Am I willing to accept a purchase price that’s below market value in exchange for not having to make repairs or pass an inspection?
  • Will it be too inconvenient to deal with random showings and open houses?
  • Do I want to take the risk that a buyer will need to provide proof of homeowners insurance and a good credit score for a lender?
  • Am I willing to accept that a potential home purchase may fall through because of problems with lending or other contingencies?
  • Do I need to get top dollar or is the market so competitive that it makes sense to work with a real estate agent?

Again, there is nothing wrong with accepting a cash deal. Some sellers know their properties won’t pass an inspection and they don’t have the time or money to make repairs. Other sellers don’t have the funds to modernize older homes. They’re aware that conventional offers will probably be lower anyway.

And then there are the sellers who need to move quickly. They don’t have months to wait for a legitimate offer. They need to relocate for a job offer, promotion, or transfer. Maybe they’re going through a divorce or split from a domestic partner. Or, they want to take advantage of any tax deductions for the current year from a home sale.

Final Thoughts

Reports from the National Association of Realtors reveal that only 5% of contracts fall through, but 22% progress slower than expected. Delays due to financing and other contingencies are the usual culprits. Cash offers can eliminate many of these delays because these transactions usually don’t come with contingencies like loan approvals and repair agreements.

That said, accepting cash for a home isn’t in every seller’s best interest. In Texas, you’re likely to lose out on 30% of what your market asking price would be. You’ll also lose possession of your home more quickly unless you negotiate a rent-back agreement until you find a replacement property.

But for sellers who don’t have the time to wait or the money to deal with improvements and repairs, cash can be a godsend. Your sale is less likely to fall through or experience delays and you’ll be free and clear of your homeowner’s responsibilities.

For more information on the pros and cons of a cash offer on a house, read our case study.

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