10 Critical Questions to Ask Any Cash Home Buyer Before Selling

Selling your house for cash can offer speed and convenience, but not all cash buyers are created equal. While many are legitimate professionals who provide fair offers and smooth transactions, others may use high-pressure tactics, lowball offers, or even outright scams to take advantage of motivated sellers.

Asking the right questions helps you separate reputable cash buyers from questionable operators, understand exactly what you're agreeing to, and ensure you're getting a fair deal. Whether you're dealing with iBuyers, local investors, or national cash buying companies, these 10 essential questions will protect your interests and help you make an informed decision.

1. Can You Provide Proof of Funds?

Why This Matters: A true cash buyer should be able to demonstrate they actually have the funds to purchase your property without financing. This is the most fundamental verification step.

What to Look For:

• Bank statement showing sufficient liquid funds (with account numbers redacted for privacy)
• Letter from their bank or financial institution verifying fund availability
• Line of credit documentation from established lender
• For companies: recent closing statements showing they've successfully completed cash purchases

Acceptable Answers:

• "Absolutely. I can provide a bank letter within 24 hours showing verified funds."
• "We work with [specific bank/lender]. I'll have them send proof of funds directly to you or your attorney."
• "Here's a recent bank statement (redacted) showing our available capital for acquisitions."

2. How Do You Calculate Your Offer?

Why This Matters: Understanding the buyer's valuation methodology helps you evaluate if their offer is reasonable and whether they're being transparent about their process.

What to Look For:

• Clear explanation of comparable sales (comps) they used
• Specific deductions for repairs or updates needed
• Transparent discussion of their profit margin or resale strategy
• Willingness to share their repair estimate or inspection findings

Acceptable Answers:

• "We used three comparable sales from the past 90 days in your neighborhood, adjusted for your home's condition, and factored in $X for needed repairs plus our closing costs and margin."
• "Based on our inspection, we estimate $X in repairs. After accounting for those costs, closing expenses, and our profit, we can offer $X."
• "We use a formula: [ARV - Repairs - Holding Costs - Closing Costs - Profit Margin]. Let me break down each component for your property."

Red Flags:

• Vague answers like "industry standard formula" without specifics
• Refusal to explain their calculations
• Vastly different offer than recent comps with no clear explanation
• Pressure to accept without understanding the numbers

3. Are There Any Fees or Costs I'm Responsible For?

Why This Matters: Some buyers advertise "cash offers" but then deduct thousands in "assignment fees," "transaction fees," or other charges at closing. You need to know your actual net proceeds.

What to Look For:

• Clear statement about who pays closing costs (traditionally the buyer)
• Transparency about any fees deducted from the offer price
• Written breakdown of estimated closing costs and net proceeds
• Confirmation there are no upfront fees required from you

Acceptable Answers:

• "We cover all closing costs. The offer price is your net proceeds."
• "We typically split closing costs 50/50, which would be approximately $X for your side based on the offer."
• "The only cost you'd be responsible for is [specific item, like outstanding taxes or liens], which we'll deduct from the offer price."

4. What Is Your Timeline for Closing?

Why This Matters: One of the main benefits of cash sales is speed. Verify the buyer can actually close quickly if that's important to you, or accommodate your timeline if you need more time.

What to Look For:

• Specific timeline (e.g., "7 days," "14 days," "by February 15th")
• Flexibility to match your needs if you require more or less time
• Realistic expectations (be skeptical of "close in 3 days" unless very experienced)
• Clear explanation of what could cause delays

Acceptable Answers:

• "We can typically close in 10-14 days once you sign the contract. Can we adjust that timeline to meet your needs?"
• "Our standard closing is 7 business days, but we're flexible. What timeline works best for you?"
• "We can close as early as next week or wait 60 days if you need time to find your next home."

Questions to Follow Up:

• "What factors could delay the closing?"
• "If I need to close by [specific date], can you guarantee that timeline?"
• "Have you ever had a transaction fall through or delay significantly?"

5. Can You Provide References from Recent Sellers?

Why This Matters: Past performance is the best indicator of how the buyer will treat you. References provide real-world feedback about the buyer's professionalism, reliability, and adherence to their promises.

What to Look For:

• At least 2-3 references from sellers in the past 6 months
• Contact information you can actually call (not just testimonials on their website)
• References from situations similar to yours (e.g., probate, foreclosure, quick sale)
• Verifiable online reviews on Google, BBB, or Facebook

Acceptable Answers:

• "Of course. I'll send you contact information for three recent sellers who've agreed to serve as references."
• "We have over 50 Google reviews with an average of 4.8 stars. I can also connect you with Mrs. Johnson, who sold us her home last month."
• "I'll email you a list of five recent transactions. Feel free to call any of them to ask about their experience."

Questions to Ask References:

• Did the buyer close on time as promised?
• Was the final offer amount what you actually received?
• Were there any surprise fees or last-minute changes?
• Would you work with them again or recommend them to family?
• How did they handle problems or complications?

6. What Contingencies Are in Your Offer?

Why This Matters: Cash offers should have minimal or no contingencies. Excessive contingencies give the buyer opportunities to renegotiate or back out, undermining the certainty that makes cash offers attractive.

What to Look For:

• Offers with no financing contingency (since it's cash)
• Clear terms around inspection contingency (if included)
• Reasonable due diligence period (7-14 days maximum)
• Understanding of what could allow them to back out

Acceptable Answers:

• "No financing contingency since we're paying cash. We include a 10-day inspection period to verify property condition, but we're buying as-is."
• "The only contingency is a title search to ensure there are no unknown liens. Otherwise, we're committed to close."
• "We have a 7-day due diligence period to verify property details, after which the contract is firm."

Red Flags:

• Vague or unlimited contingency periods ("subject to partner approval," "subject to inspection satisfactory to buyer")
• Financing contingency in a supposed "cash" offer
• Contingencies that seem designed to allow renegotiation (e.g., "subject to appraisal")
• Inability to clearly explain what contingencies mean

7. How Long Have You Been Buying Homes?

Why This Matters: Experience indicates the buyer knows how to navigate complications, has established closing processes, and has a track record you can verify. New buyers aren't necessarily problematic, but require extra vetting.

What to Look For:

• Specific timeframe (months or years in business)
• Number of properties purchased (especially recently)
• Local market knowledge and experience
• Business registration and licensing information

Acceptable Answers:

• "We've been buying homes in [area] for 8 years and have completed over 200 transactions."
• "I've been a licensed real estate investor for 5 years, purchasing 3-5 properties monthly."
• "Our company was founded in 2018 and we've purchased 150+ homes across [state]."

For Newer Buyers, Ask:

• "What's your background in real estate?"
• "How many properties have you successfully closed?"
• "Can you provide references from your completed transactions?"
• "Do you have a mentor or partner with more experience?"

8. Who Will Handle the Closing?

Why This Matters: Reputable buyers use established title companies or real estate attorneys. The closing professional protects both parties and ensures legal compliance. Be wary of buyers who want to "handle everything themselves."

What to Look For:

• Name of specific title company or attorney
• Your right to use your own title company or attorney if preferred
• Clear explanation of the closing process
• Established, insured closing professional

Acceptable Answers:

• "We typically work with [Title Company Name], but you're welcome to choose your own title company if you prefer."
• "Our closings are handled by [Attorney Name] at [Law Firm]. They'll coordinate all the paperwork and fund transfer."
• "We'll use a licensed title company. I can provide three options, or you can suggest one you're comfortable with."

Red Flags:

• "We don't need a title company—I'll handle the paperwork."
• "Let's just do the closing between us to save money."
• Reluctance to let you choose your own closing professional
• Using a title company or attorney they own or have undisclosed relationship with

9. What Happens If You Back Out?

Why This Matters: Understanding the buyer's commitment level and what penalties they face for backing out protects you from wasting time on a non-serious buyer.

What to Look For:

• Earnest money deposit (typically 1-3% of purchase price)
• Clear terms about when earnest money is refundable vs. non-refundable
• Specific date when contract becomes binding (after due diligence period)
• Explanation of scenarios where they could legally back out

Acceptable Answers:

• "We'll put down $5,000 in earnest money, which you keep if we back out without valid cause after the inspection period."
• "After our 10-day due diligence, the contract is binding. If we back out after that, you keep our earnest deposit and can pursue damages."
• "The only way we can back out without penalty is if the title search reveals undisclosed liens or ownership issues."

Red Flags:

• No earnest money deposit required
• Minimal earnest deposit (less than $500-$1,000)
• Indefinite or vague contingency periods allowing them to back out anytime
• "We've never backed out" (doesn't answer the question about penalties)

10. Can I Review the Contract with My Attorney?

Why This Matters: This question tests whether the buyer is transparent and confident in their contract terms. Legitimate buyers welcome attorney review; scammers pressure you to sign immediately.

What to Look For:

• Enthusiastic encouragement to have attorney review
• Reasonable timeline for review (3-5 days)
• Willingness to explain any contract terms you don't understand
• Patience with questions and revisions

Acceptable Answers:

• "Absolutely. We always recommend sellers have an attorney review before signing. Take all the time you need."
• "Of course. We want you to feel completely comfortable. Do you have an attorney, or would you like recommendations?"
• "I encourage all my sellers to get legal advice. Let me know if your attorney has any questions about the contract terms."

Red Flags Summary: When to Walk Away

In addition to the warning signs mentioned above, immediately cease communication with any cash buyer who:

• Requests upfront fees for any reason (inspection, appraisal, processing, commitment)
• Cannot provide proof of funds within 24-48 hours of request
• Pressures you to sign quickly without time to review or consult professionals
• Offers significantly more than market value (likely a bait-and-switch tactic)
• Has no online presence or reviews, or has multiple negative reviews citing scams
• Uses scare tactics ("You'll lose your house to foreclosure!" "This is your only option!")
• Asks you to make the property vacant before closing or before receiving payment
• Wants to record deed before you receive payment
• Changes terms significantly at the last minute without valid reason
• Refuses to use licensed title company or closing professional
• Has spelling errors, unprofessional communications, or uses free email addresses (gmail, yahoo)
• Cannot explain their business model or where they get their funding

Frequently Asked Questions

Should I get multiple cash offers before accepting one?

Yes, absolutely. Just as you'd get multiple bids for a major home repair, you should solicit offers from 3-5 cash buyers. This gives you leverage to negotiate and helps you identify fair market value for a cash sale. Different buyers have different criteria—one might value your location more, another might have lower repair cost estimates. Comparing offers protects you from leaving money on the table.

What's a reasonable cash offer compared to market value?

Cash offers typically range from 65-85% of retail market value, depending on your home's condition, location, and the buyer's business model. Expect 70-75% for homes needing significant repairs, 75-80% for homes needing cosmetic updates, and 80-85% for move-in ready homes in desirable areas. If an offer is below 65% of true market value, either your property has serious issues you're not aware of, or the buyer is lowballing.

How can I verify a cash buyer is legitimate?

Verify legitimacy by: (1) Checking business registration with your Secretary of State's office, (2) Searching for reviews on Google, BBB, and Facebook, (3) Verifying proof of funds through their bank, (4) Calling provided references, (5) Searching their name/company in county property records to confirm recent purchases, (6) Confirming they have a physical office address (not just P.O. box), (7) Verifying any claimed licenses or certifications. Legitimate buyers will have an established digital footprint and verifiable transaction history.

Is it normal for cash buyers to reduce their offer after inspection?

It depends on their initial offer terms. If the buyer offered "as-is" with no inspection contingency, they should not reduce the offer based on inspection findings—they committed to buy in current condition. If the contract included an inspection contingency, reductions are acceptable only if the inspection reveals previously undisclosed material defects. Significant reductions for cosmetic issues or problems that were visible during the initial walkthrough indicate a bad-faith negotiation tactic. Always clarify inspection terms before signing.

What should I do if a cash buyer changes terms at closing?

If a buyer significantly changes terms at closing (reducing price, adding fees, changing conditions), you have every right to walk away. This tactic—called a "closing table hijacking"—banks on sellers feeling pressured to accept rather than restart the process. Immediately consult with the closing attorney or title agent, who can advise on your rights. Document all communications and original contract terms. In most cases, the buyer's earnest deposit should be forfeited to you for breach of contract. Don't let time pressure or emotional investment force you into accepting unfair last-minute changes.

Do I need to hire an attorney when selling to a cash buyer?

While not legally required in all states, hiring a real estate attorney is highly recommended when selling for cash, especially if: (1) You've never sold a home before, (2) The contract contains complex terms or contingencies, (3) You're selling due to distress (foreclosure, divorce, probate), (4) The buyer is offering significantly below market value, or (5) You have any doubts about the buyer's legitimacy. Attorney fees ($500-$1,500 typically) are a small price for peace of mind and protection from costly mistakes.

How long should I give a cash buyer for their due diligence period?

Reasonable due diligence periods for cash buyers range from 7-14 days. This allows time for inspections, title searches, and property research. Be skeptical of buyers requesting 30+ day due diligence periods—this often indicates they're trying to tie up your property while finding financing or another buyer (wholesalers). Conversely, if a buyer needs less than 7 days, ensure they've already done preliminary research and aren't rushing you into a decision. The due diligence period should be long enough for reasonable investigation but short enough to maintain momentum toward closing.

What's the difference between a cash buyer and a wholesaler?

Cash buyers purchase properties with their own funds or established financing and typically keep the property (to flip, rent, or hold). Wholesalers put properties under contract with the intent to assign (sell) that contract to another buyer, earning an "assignment fee." Wholesalers often can't prove funds because they don't have the capital—they're middlemen. This isn't necessarily bad, but know what you're dealing with. Wholesalers may market your property to other investors, extending timelines and creating uncertainty. Ask directly: "Are you the end buyer, or will you assign this contract?" Honest wholesalers will disclose their business model.