To sell your house for cash, you clear the title, sign a purchase agreement with a verified buyer, and close through a title company or attorney, typically in one to three weeks instead of the 30 to 45 days a mortgaged sale takes. The legal steps are the same as any other home sale. What changes is speed: with no lender underwriting the buyer, there is no appraisal wait, no loan approval, and no financing contingency to satisfy.
Below is what each step actually requires, what it costs, and where cash deals carry risks a financed sale does not.
Pull Your Property Documents First
Start with the current deed. It proves you own the home and identifies you as the person legally allowed to sell it. If you cannot find your copy, request a certified one from the county recorder or registrar of deeds; the fee is usually a few dollars per page.
Check the name on the deed against your government-issued ID. A maiden name, a misspelling, or an outdated marital status can cloud the title and stall closing. If your name has changed, gather the marriage certificate, divorce decree, or court order that connects the two names so the title company can document the chain.
Pull your current property tax statement from the local assessor. Unpaid property tax creates a lien that has to clear before the deed can transfer, so you want the number in front of you before a buyer sees it on a title report.
If the home is in an HOA, order the resale certificate or disclosure packet from the association’s management company. It states the dues, any pending special assessments, and the community rules. Management companies charge a preparation fee; some states cap it, others leave the amount to the HOA.
Clear the Title and Any Existing Mortgage
A clear title means no one else has a recorded claim against the property: no outstanding mortgage, no contractor lien, no unresolved judgment. A title company or real estate attorney runs a title search and issues a title commitment listing every recorded claim and every exception the final title insurance policy will not cover. Read it early. Disputing an error or negotiating a lien payoff takes time you will not have on closing week.
If you still owe on a mortgage, ask your lender for a payoff statement. It shows the exact amount required to satisfy the loan as of a specific date, including principal, accrued interest, and fees. At closing, the escrow agent uses the buyer’s funds to pay the lender directly, and the lender then files a lien release with the county.
Other liens — a second mortgage, a mechanic’s lien, a tax lien, a judgment lien — are typically paid out of your sale proceeds by the title company at closing.
Disclosures You Still Owe the Buyer
A cash sale does not waive disclosure. The vast majority of states require sellers to complete a written property disclosure covering known defects in the home’s major systems: roof, foundation, plumbing, electrical, water damage, pests, environmental hazards, and any unpermitted additions. Only a handful of states still follow a strict buyer-beware rule.
One disclosure is federal and applies everywhere. If the home was built before 1978, you must give the buyer information about any known lead-based paint or lead hazards, provide the EPA’s lead hazard pamphlet, and allow at least 10 days for a lead inspection before the buyer is bound by the contract.1Office of the Law Revision Counsel. 42 U.S. Code 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property The contract must include a signed lead warning statement. Noncompliance can trigger civil penalties of more than $22,000 per violation.2eCFR. 24 CFR 30.65 – Failure to Disclose Lead-Based Paint Hazards
Verify the Buyer’s Cash Before You Sign
Ask for proof of funds within the first day or two of receiving an offer. A legitimate buyer will provide a letter on bank letterhead, signed by a bank officer, confirming the account holder’s name and available balance as of a recent date. A recent bank or brokerage statement showing sufficient liquid funds works as well.
Be careful with “we buy houses” companies and individual investors. Reputable cash buyers do not ask you to pay upfront fees of any kind. They do not pressure you to sign within 24 hours, and they do not discourage you from using a title company or attorney. Offers well above market value are a warning sign, because a legitimate cash buyer factors in a resale margin and typically offers below full retail.
Other red flags: no verifiable business presence, vague answers about how the offer was calculated, an inability to produce proof of funds promptly, or a last-minute change in price. Closing through a licensed title company or attorney protects you from deed theft and ensures the funds are properly disbursed.
What the Purchase Agreement Must Include
The purchase agreement is the binding contract. You can get a standardized form from your state real estate commission or have an attorney draft one. At a minimum, it needs to cover:
- The legal description of the property as it appears on the deed (lot and subdivision or metes-and-bounds), not just the street address.
- The purchase price.
- The earnest money deposit, typically 1% to 5% of the purchase price, held in a neutral escrow account.
- The closing date, often one to three weeks out in a cash deal.
- Allocation of closing costs: title insurance, recording fees, transfer taxes, and other closing expenses.
- Any contingencies the buyer wants to keep.
Even in a cash deal, buyers often keep an inspection contingency giving them a set number of days to hire an inspector and request repairs or renegotiate. Some waive it to make the offer more attractive. There should be no financing contingency, and the contract should say so explicitly: the sale is not contingent on the buyer obtaining a loan.
How Closing Works
Closing is where ownership changes hands. Both parties submit the signed purchase agreement to a neutral third party: an escrow agent, a title company, or, in some states, a real estate attorney. About half a dozen states require an attorney at closing, and several others strongly recommend one. Check your state’s rule early.
The buyer sends the full purchase price to the escrow or title company by wire or cashier’s check. The title company confirms the funds have cleared, then you sign the new deed. In a standard arm’s-length sale, that is a warranty deed, which guarantees you hold clear title and there are no undisclosed claims.
You sign the deed in front of a notary, who verifies your identity and witnesses the signature. Most states cap the notary fee for a single signature somewhere between $2 and $25.
The title company files the new deed with the county recorder. Recording fees vary widely: some counties charge a flat fee per document, others charge per page, and totals range from under $50 to several hundred dollars. Once recorded, the deed is public notice that the home has a new owner. The escrow agent then releases the sale proceeds to you, net of any payoffs and closing costs.
Protect Yourself From Wire Fraud
Wire fraud is a real risk in real estate closings. Scammers monitor email between buyers, sellers, and title companies, then send fake wiring instructions to divert funds. Once money goes to the wrong account, recovering it is extremely difficult.
Verify every set of wiring instructions by calling the title company at a phone number you already have on file, not one supplied in an email. Treat any last-minute change to wiring instructions as suspicious; legitimate title companies do not suddenly change their bank details. Right after you send or receive a wire, call to confirm the funds landed at the correct account.
Closing Costs You Still Pay
Cutting the lender out eliminates origination charges and mortgage insurance, but several costs remain. Amounts vary by location and by what your contract says, but plan for:
- Title search and title insurance. The search fee covers records research. An owner’s title insurance policy protects the buyer against undiscovered title defects and is often paid by the seller, depending on local custom.
- Transfer taxes. About 36 states impose a tax or stamp fee when real property changes hands, calculated as a percentage of the sale price. Rates run from as low as 0.01% to over 1.5%. Who pays depends on state law and contract terms.
- Recording fees, charged by the county to record the new deed.
- Escrow or closing agent fees, sometimes split between buyer and seller.
- HOA transfer or resale certificate fees, if the home is in an association.
- Prorated property taxes, split so each party pays for the days they owned the home during the current tax period.
Ask the title company for the preliminary settlement statement before closing day and go through the line items.
Taxes on the Sale
Federal law requires the party responsible for closing — usually the title company or escrow agent — to report the sale to the IRS on Form 1099-S, which records the gross proceeds.3Office of the Law Revision Counsel. 26 U.S. Code 6045 – Returns of Brokers You may be able to skip the 1099-S entirely by signing a certification that the sale qualifies for the full capital gains exclusion under Section 121. That certification is available when the sale price is $250,000 or less ($500,000 or less for married couples filing jointly), the entire gain is excludable, and there has been no period of nonqualified use of the property after 2008.4Internal Revenue Service. Instructions for Form 1099-S
To qualify for the Section 121 exclusion, you must have owned and used the home as your principal residence for at least two of the five years before the sale.5eCFR. 26 CFR 1.121-1 – Exclusion of Gain From Sale or Exchange of a Principal Residence The two years do not need to be consecutive; they need to add up to 24 months inside the five-year window. Meeting the test lets you exclude up to $250,000 of gain as a single filer or up to $500,000 as a married couple filing jointly.6Office of the Law Revision Counsel. 26 U.S. Code 121 – Exclusion of Gain From Sale of Principal Residence Gain is the sale price minus selling expenses, minus your cost basis (the original purchase price plus qualifying improvements).
Any gain above the exclusion, or any gain at all if you do not meet the ownership and use tests, is taxable as a capital gain. Hand your tax preparer the final settlement statement; it has the numbers needed to calculate gain accurately.
After Closing
Notify the local tax assessor that you have sold the property and send a copy of the recorded deed. That keeps the next tax bill from generating a delinquency notice in your name.
Close or transfer every utility account — electric, gas, water, sewer, trash, internet — as of the closing date, so charges the new owner runs up do not land on your bill.
Keep the purchase agreement, settlement statement, deed, disclosures, and related correspondence until the IRS statute of limitations expires for the year you reported the sale.7Internal Revenue Service. How Long Should I Keep Records? For most people that is at least three years after filing. If the sale produced a large gain that will affect future returns, hold the records longer.