Selling Your Home to an Investor: What You Need to Know
What does Texas require an investor to tell you before you sign?
If the person making the offer intends to assign your contract to someone else rather than buy the house themselves, Texas Occupations Code § 1101.0045 requires them to disclose the nature of that equitable interest in writing — and since the 2024 amendment, that written disclosure goes to the seller, not just the eventual buyer. Selling or assigning a contract without disclosing it is legally defined as engaging in real estate brokerage, which requires a license.
- Three different things call themselves "investors," and the differences change your outcome.
- The disclosure must come before you sign, not after.
- An investor offer is only low or fair compared to your net from a traditional sale — not the list price.
- Ask one question: "Are you buying this house, or assigning the contract?"
If your house needs work you can't fund, or it's been sitting without offers, or you just need to be gone by a certain date, you'll eventually hear from someone who buys houses. The offer is usually below market, always fast, and rarely explained in much detail.
Selling to an investor is a legitimate option, and for some sellers it's the right one. But "investor" covers three quite different businesses, and Texas law treats one of them specifically. Knowing which one is standing in your kitchen is the difference between an informed decision and a surprise.
Three different businesses, one word
The actual buyer
Someone who intends to close, take title, and either rent the house or renovate and resell it. They have funds or a lending relationship, they've looked at the property, and their offer reflects what they think it's worth after repairs minus their margin. This is the straightforward version, and you can verify it by asking for proof of funds.
The wholesaler
Someone who puts your house under contract with no intention of buying it. Their plan is to find a real buyer before closing and assign your contract to them for a fee. You may never meet the person who actually purchases the house.
This is legal in Texas, with conditions — and the conditions exist to protect you. More below.
The iBuyer or institutional purchaser
A company using an automated valuation to make a fast offer, typically with a service fee and a repair deduction assessed after inspection. The initial number and the final number are frequently different, and the deductions are where the real negotiation happens.
All three can produce a fair result. The problem is that all three open the conversation the same way, and only one of them is legally required to tell you which it is.
What Texas law requires in writing
Texas Occupations Code § 1101.0045 says a person may acquire an option or an interest in a contract to purchase real property and then sell that option or assign that contract without a real estate license, but only if two conditions are met. They must not use the contract to engage in real estate brokerage, and they must disclose in writing the nature of the equitable interest to any seller or potential buyer.
Subsection (b) is blunt about what happens otherwise: a person who sells or assigns that interest without disclosing it is engaging in real estate brokerage — which, without a license, is a violation of the Real Estate License Act.
The statute was added in 2017 and amended effective January 1, 2024 by Senate Bill 1577, which is the change that matters to you. The written disclosure now has to reach the seller. Before that amendment, the obligation was easier to read as running only to the eventual buyer.
Two practical consequences:
The disclosure has to come before you sign. A wholesaler cannot have you execute a purchase agreement and then mention the assignment plan afterward. The disclosure is about the nature of the interest they're acquiring, which means it belongs in front of you while you're still deciding.
You are entitled to ask directly. "Are you buying this house yourself, or are you planning to assign the contract?" is a fair question with a legally required answer. If the response is evasive, or if you're told it doesn't matter, you have learned something useful about who you're dealing with. It matters quite a bit: an assignment means your closing depends on a buyer who hasn't been found yet.
None of this makes wholesaling improper. Plenty of wholesalers disclose properly and bring real buyers. But the disclosure is your protection, and it's the easiest thing in this entire process to verify.
Is the offer actually low? Run the comparison honestly
"Investors pay below market" is true and, by itself, not very useful. The number that matters is not the list price you'd hope for — it's what you would net from a traditional sale, after the costs the investor offer avoids.
Against a conventional sale, price out all of it: repairs a buyer's inspector will find and a lender may require, agent professional fees (which are fully negotiable regarding how much and who pays), title and closing costs, a survey, seller concessions, and the carrying cost of every month the house doesn't sell — mortgage, taxes, insurance, utilities. In Rockwall County and across Northeast Dallas, those carrying costs are not trivial on a house that sits.
Sometimes that math closes most of the gap and the investor offer is genuinely competitive. Sometimes the gap stays wide and the speed isn't worth it. The point is that you cannot know which until you've run both numbers, and an investor's offer letter will never do that comparison for you.
A few specifics worth pinning down before you decide:
Is the offer contingent, and on what? A cash offer with an inspection contingency and a long option period is not the certainty it appears to be. Ask what lets them walk, and what you keep if they do.
Where is the earnest money, and how much? It should be at a title company, not with the buyer. The amount tells you how serious they are.
What is the actual closing date, and who controls it? "We can close in seven days" and "we will close in seven days" are different commitments.
If you're weighing this against other fast options, how cash offers actually work in Texas covers the mechanics, and what selling as-is really means is worth reading first, because as-is is available on the open market too — it isn't something only investors offer. If an investor has proposed taking over your existing loan rather than paying it off, that's a different transaction with its own statute: what Texas requires in a subject-to deal. And if the pressure you're feeling is mostly about timing, selling now versus waiting works through that question with local numbers.
Before you accept any investor offer, it's worth knowing what the house would bring on the open market and what you'd actually net from each path. That's a twenty-minute conversation and it costs you nothing. Agent professional fees are fully negotiable regarding how much and who pays, and I'll give you a straight comparison whether or not you list with me — including telling you if the investor offer is the better deal.
What's my home worth?Compare your options
Or call The Dunnican Team directly at (972) 679-1789.
Frequently asked questions
Does an investor have to tell me they're wholesaling my contract in Texas?
Yes. Texas Occupations Code § 1101.0045 permits an unlicensed person to acquire an option or contract interest and then sell or assign it, but only if they disclose the nature of that equitable interest in writing to any seller or potential buyer. Since the January 1, 2024 amendment under Senate Bill 1577, that written disclosure must reach the seller. Assigning without disclosing is defined by the statute as engaging in real estate brokerage.
Is wholesaling legal in Texas?
Yes, within limits. An unlicensed person may acquire and assign a contract interest provided they do not use the contract to engage in real estate brokerage and they make the required written disclosure. What is not permitted is marketing the property itself, negotiating as someone's agent, or assigning the contract without telling the seller what they are doing.
How much below market do investors typically offer?
There is no fixed figure, and any number quoted as typical should be treated skeptically. Offers reflect the investor's estimate of value after repairs, their repair estimate, their holding and resale costs, and their required margin. The useful comparison is not the offer against your hoped-for list price — it is the offer against what you would net from a traditional sale after repairs, professional fees, closing costs, concessions, and carrying costs while the home is listed.
What should I ask an investor before accepting an offer?
Ask whether they are buying the property or assigning the contract, and request the written disclosure if it is an assignment. Ask for proof of funds. Ask what contingencies let them terminate and what you keep if they do. Ask where the earnest money is held and how much it is. Ask for the specific closing date and who controls it. Ask for references from sellers they have actually closed with.
Can I sell as-is without using an investor?
Yes. Selling as-is means you are not agreeing to make repairs; it does not require an investor buyer and it does not remove your obligation to complete the Texas Seller's Disclosure Notice. Plenty of homes sell as-is on the open market, sometimes to buyers who will pay more than an investor because they intend to live there. As-is is a contract term, not a category of buyer.
This article is general information about Texas real estate practice and is not legal, tax, or financial advice. I'm a licensed REALTOR®, not an attorney. Texas Occupations Code § 1101.0045 is summarized as of September 2026 and may be amended; how it applies depends on the specific facts of a transaction. Anyone evaluating an investor offer should consider having a Texas real estate attorney review the contract before signing.
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