Trick or treat? How to tell a fair cash offer from a scary one

Halloween is all about tricks and treats, and the cash home-buying world has both. A treat is an offer you understand, from a buyer who answers every question. A trick is a number that shows up with no explanation, followed by a surprise at the closing table. Here is how to tell them apart before you sign anything.

Three questions to ask any buyer this week

• Can you show me proof of funds?

• How exactly did you calculate this number?

• After closing, what will I walk away with, to the dollar?

A legitimate buyer answers all three without hesitation. If the answers get vague, that tells you what you need to know.

Get more than one offer

The best way to know whether an offer is fair is to compare it. Get a second offer, and compare both to what fixing up and listing the house would really cost you. A good buyer won't pressure you to skip that step.

Common questions

How can I tell if a cash offer on my house is fair?

A fair offer comes with a clear explanation, usually based on recent comparable sales and the cost of the repairs your house needs. Ask the buyer to walk you through the number, and compare it with what fixing and listing the house would cost you.

What are the red flags in a cash home offer?

Common red flags include fees you have to pay up front, pressure to sign right away, no proof of funds, a number with no explanation, and a vague closing date.

Are cash home buyers legitimate?

Many are. Like any industry, it also has bad actors, which is why it's worth checking proof of funds, business history, and how the offer was calculated before signing anything.

Should I get more than one cash offer?

Yes. Comparing offers is a smart way to tell what's fair, and a legitimate buyer will not pressure you to skip that step.