So, you’ve put your home on the market, and the offers are rolling in! This is super exciting, and you are likely navigating the process of choosing which offer to accept. You’ve received a cash offer, and you want to make sure it’s not too good to be true; well, we’re here to guide you on accepting the right cash offer. Let’s look at a few things to look for in a cash home buyers contract.
1. How long is the contract? And is it a TREC contract?
Here in Texas, a TREC (Texas Real Estate Commission) contract is the only contract we recommend considering. Many other contracts, especially one-page contracts, do not allow for enough language to fully protect the seller. If the buyer has created their own contract, we suggest reading the fine print carefully if you choose to accept.
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2. Is there an option period?
Option periods are the few days a buyer has to terminate the contract. Option periods are less common with cash offers but are still very much an option for buyers. You want to ensure that if there is an option period, the time period is reasonable, and the money offered for the time is fitting. Generally speaking, a 3-7 day option period is not uncommon to allow for the inspection of big-ticket items. Anywhere from $100-$300 is offered in exchange for the ‘option’ to terminate within the time period if the buyer doesn’t like what they see. One thing to keep in mind is that many wholesalers use this option period to find a true end buyer. If the time period is extensive and/or the monetary value associated is not fitting, it may be too good to be true.
3. How much is the earnest money?
Earnest money, or good faith money, is something the buyers will pay to show they are genuinely invested in purchasing your property. The higher the earnest money, the more committed the buyer is and the less likely to back out of the contract. The buyer must send earnest money within three days of contracting a property to maintain the agreement’s validity.
4. Are there contingencies?
Contingencies, or purchase agreements, are also very common in real estate contracts. Oftentimes, a buyer will have a few contingencies along with their offer. For example, “I will purchase your property for x amount of dollars contingent on the inspection report.” There are many examples of contingencies, such as inspection, appraisal, and financing. You want to examine what contingencies, if any, are tied to that offer you are receiving.
5. Who is the title company?
The title company will handle most of your real estate sale paperwork. You want to make sure that the title company the buyer requests is a reputable title company to ensure a smooth closing. Look at online reviews and do a bit of research to ensure a smooth closing.
We hope we were able to help you understand your cash offer a bit better. Not only are these things helpful to know when dealing with a cash offer, but they are also important to look into while comparing each and every offer!
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