How to read a cash offer, line by line

Start with the purchase price, then look past it

The purchase price is the amount the buyer agrees to pay for the property. It is the headline, and it is the easiest number to compare. It is also the number least likely to match the amount deposited in your account.

Between the price and your proceeds sit your mortgage payoff, any liens or unpaid taxes, the closing costs you agree to pay, prorated items such as property taxes or HOA dues, and any credits you give the buyer. Two offers with the same price can produce very different results once those items are subtracted.

A useful habit is to ask every buyer for an estimated net sheet that lists each deduction. Treat it as an estimate until the title or closing professional prepares the final settlement figures.

Who pays the closing costs

Closing costs can include title search and title insurance, settlement or escrow fees, recording fees, transfer taxes, courier and wire fees, and attorney fees where an attorney is involved. Which side customarily pays each item varies by state and county, and the contract can change the custom.

Read the offer for a plain statement of who pays what. Phrases like buyer pays all closing costs or seller pays customary costs mean different things, so ask for the specific items in writing.

• Does the buyer pay the title, escrow, and recording charges?
• Who pays any transfer or deed tax in your area?
• Are there service, administrative, or processing fees charged by the buyer?
• Are any costs shifted to you if the closing date moves?

Earnest money: what it is and what it protects

Earnest money is a deposit the buyer puts down to show commitment. It is usually held by a neutral title company, escrow agent, or attorney, not by the buyer, and it is normally credited toward the price at closing.

What matters is when the deposit is delivered, who holds it, and under what conditions it can be returned to the buyer. If the buyer can walk away for almost any reason during a long inspection period and get the deposit back, the deposit offers you little protection during that window. Read the deposit terms alongside the contingencies.

Contingencies and inspection periods

A contingency is a condition that must be met before the buyer is obligated to close. A cash offer usually has no financing contingency, because the buyer is not waiting on a loan, but it can still include inspection, due diligence, title, appraisal, or other conditions.

Each contingency is a door the buyer may be able to use to cancel or renegotiate. Note how long each one lasts, what has to happen for it to end, and whether the price can be adjusted after an inspection. Ask the buyer for proof of funds so you know the cash actually exists.

Also look for an assignment clause. Some contracts let the buyer transfer the deal to someone else before closing. That is not automatically a problem, but you should know who will ultimately buy the house and whether your terms survive the transfer.

Closing date and possession

The closing date is when the sale is scheduled to be completed. Possession is when you hand over the keys. They are often the same day, but they do not have to be. Some sellers need extra time to move, and some contracts allow a short stay after closing under a written agreement.

Read whether the date is fixed, flexible, or tied to events such as a title clearance. If you need a specific date to line up with a move, a job, or another purchase, put it in the contract rather than relying on a verbal promise. Also check the condition you must leave the house in and what happens to belongings left behind.

What as-is does and does not mean

In most offers, as-is means you are not agreeing to make repairs or give repair credits. The buyer accepts the property in its current condition. It does not usually erase disclosure duties that apply where you live, and it does not by itself stop a buyer from inspecting or using a contingency to cancel.

If the offer says as-is but also includes a long inspection period with a right to renegotiate, the as-is language may matter less than it seems. Read both together. Disclosure requirements vary by state, so ask a local real estate attorney if you are unsure what you must share.

Comparing offers fairly

Line up each offer using the same categories: price, costs you pay, deposit and its terms, contingencies, closing date, possession, and any fees. Then estimate the net for each. A listing with an agent may produce a higher net, especially for a move-in-ready house when you have time for showings and can handle repairs a buyer's inspection might request. A direct sale can make sense when the condition, timing, or situation makes a traditional listing hard.

Prominent Cash Offer buys houses nationwide in any condition. There are no fees or commissions, Prominent pays the closing costs, you choose the closing date, and the offer comes in writing with no obligation to accept. Whoever you talk to, read every term before you sign and get professional advice where the stakes call for it.