Texas homeowners consider selling to cash buyer without a real estate agent

Q: As my husband was taking out the trash last week, a woman passed him walking her dog. She told him she was interested in our house and inquired if we were looking to sell. My husband told her that we were planning on moving within the next year.

Later in the week, she came by to look at the house and expressed interest in purchasing the home, in cash, next year. She would like to be notified before we put the home on the market, as she would like to purchase it.

If we can agree on a price, do we need real estate agents? In Houston, where we are located, real estate attorneys are not commonly used in residential real estate transactions. Could we not involve real estate agents and save on the commission costs and just do the real estate transaction with a real estate attorney?

A: Buying with cash is a hot topic these days. There are quite a few stories in the news these days of buyers purchasing real estate without financing — meaning the buyers had enough cash in the bank to close on the home without taking out a loan.

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While your buyer may be a true cash buyer, other buyers make what they call a “cash” offer. What they actually mean is that they will not make the deal contingent on their ability to obtain financing for the purchase from a lender.

Most of our readers only care that the home they’re selling closes and that they get the proceeds from the sale safely deposited into their account. When you have a buyer that has enough cash in the bank ready to close on your home, you shouldn’t have to worry whether the buyers’ lender will back out of the deal or fail to approve the buyer. In moving forward with this buyer, you’d want to know whether the buyer truly has the cash on hand or whether they plan to obtain financing.

If your buyer has the cash, they should give you a letter from their financial institution stating that there are sufficient funds in the buyer’s account to cover the purchase price of the home.

Once you decide to move forward, you’ll need to put together a purchase and sale agreement. You live in an area where attorneys are not customarily involved in real estate transactions. But you may have some choices. The first choice for you is to hire a real estate attorney to represent you, prepare the necessary documents and guide you through the home sale process. The second is to hire a settlement agent that can assist you with the documentation you need in the contract for the sale of the home through the settlement of the closing.

In locations where real estate agents assist homebuyers and sellers in real estate transactions, the agents will typically provide the documentation to the parties. They’ll assist the sellers in filling out the contract and making required disclosures needed to sell the home. The agent may also recommend a closing settlement agent that can draft the closing documents and close the transaction.

A third option is to find a real estate agent that will provide some services for a flat fee rather than a percentage of the sales price.

You have time, so do a little research. Talk with the larger settlement companies in your area to determine whether they can provide you with the assistance you need, including the signing of the purchase and sale agreement through the closing. While the settlement agent may charge a fee to only prepare the closing documents and close the sale, they may have an add-on fee to assist you with the purchase and sale documents as well.

You can talk to a local real estate agent to see if they might provide the services you need. But if you and your neighbor have already agreed on a price for the home, you don’t need to pay an agent a percentage commission to assist you with the paperwork to sell the home. However, an enterprising agent may be willing to assist you for a $500 or $1,000 fee.

Lastly, a real estate attorney in your area may have sufficient experience to assist you as well in this process. However, Sam’s experience is that many real estate attorneys in states that do not commonly use attorneys to close residential real estate sales may not want to take on the obligation of helping a seller or a buyer in a simple residential real estate closing.

Having said all that, what you really need is a person that has a deep knowledge of the residential real estate process who can explain to you the documentation you need to sign, go over other services you’ll need, and walk you through the process from start to finish.

In states that have attorneys assist sellers and buyers in residential real estate closings, the attorney advocates for either the seller or the buyer and works with their seller or buyer through the transaction. That attorney has the task of explaining the ins and outs of the transaction, helping their clients avoid pitfalls, and bringing the deal to a successful closing.

Just remember that if your buyer plans to finance the property, the real estate attorney representing their mortgage lender will not represent you.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)

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