Buying a Dallas Home With Cash

What do I need to show a seller?

Proof of funds. A seller wants to see that the money is there and ready before taking your offer seriously.

• A recent bank or brokerage statement showing enough to cover the price and closing costs. You can black out account numbers.
• Or a short letter from your bank or financial adviser confirming the funds.
• If you need to sell investments, start early. Settlement and transfers can take a few days.
• If part of the money will come from selling your current home, say so up front. That is a different kind of offer.

Keep the money in an account you can wire from. Large transfers sometimes need extra steps with your bank, so ask about its limits before closing week.

Why is a cash offer stronger, and what does it still include?

A cash offer takes away the biggest risk a seller worries about: the loan falling through. There is no lender approval, no lender appraisal and usually a faster closing. That can win a home even when another offer is a little higher.

You still protect yourself the same way a loan buyer does. In the standard Texas contract, a cash offer still includes:

• Earnest money held by the title company.
• An option period for an option fee you negotiate. During it you can end the contract for any reason. The fee is credited toward the price if you close.
• Inspections of the house, the roof, the foundation and anything else you want checked.
• A survey. The seller may give you an existing survey with a signed statement that nothing has changed, or you can order a new one.
• A title review. You read the title commitment and can object to problems before closing.
• The seller's disclosure notice and, where there is one, the HOA's documents.

For how sellers weigh cash against other terms, see how to compare offers.

Do I need an appraisal if I pay cash?

No. Without a loan, no one requires one. It is your choice, and sometimes it is worth it.

Consider an appraisal when the home is unusual, when there are few recent sales like it, or when you are paying at the top of the range and want an independent check. Order it early in the option period so you can still use what you learn. Most of the time, I can show you closed sales on the street and you can decide without one.

An appraisal also helps if you might take out a loan on the home later, or if you want a clear record of what you paid against the market for estate or insurance planning. Ask your CPA or adviser whether that matters for you.

How do I make a cash offer stand out?

Make it simple and certain for the seller. Cash already removes the loan, so the rest of the offer should show you are ready to close.

• Send the proof of funds with the offer, not after.
• Offer a closing date that suits the seller, or a short leaseback if they need time to move.
• Keep the option period short, with a fair option fee, and schedule inspections right away.
• Put down solid earnest money, which shows you are serious.
• Name the title company and say you are ready to open the file the day the contract is signed.

Ask what matters most to the seller before you write the offer. Sometimes it is the price. Often it is the date, the certainty, or not having to fix small things. I find that out from the listing agent first, so your offer answers the questions the seller really has.

How do I keep my money safe when I wire it?

Call the title company before you send anything, at a phone number you looked up yourself, and confirm the wiring instructions out loud. Criminals send fake emails that look like they come from the title company, the agent or the lender, with new account details. Once a wire goes out, it is very hard to get back.

1. Get the title company's phone number from its own website or from me in person, never from the email with the instructions.
2. Treat any email that changes the account details as fraud until you confirm it by phone.
3. Call again after you send the wire to make sure it arrived.
4. Never send wiring details or account numbers by text or email.

Can I buy first with cash and sell my house after?

Yes, and it is the cleanest way to move only once. You buy the new home, move in on your own schedule, and then sell the old one empty, clean and easy to show.

Plan for a few months of owning both. That means two sets of property taxes, utilities and insurance. Tell your insurer when the old house is vacant, because coverage can change. Some buyers later take out a loan on the new home to rebuild their savings. Ask a lender how that works before you buy.

When you list, every seller I work with gets a listing update email with a report every Monday. For the other ways to time two moves, see sell first or buy first.

Should I talk to a CPA first?

Yes. Where the money comes from can change your taxes. Selling stocks may create a gain. Pulling from a retirement account may count as income. Selling your old home has its own rules. A CPA can tell you which accounts to use, in what order and in which tax year.

If family members are helping with the purchase, ask about gift rules too. I am glad to work with your CPA and adviser on the timing.