The "we buy houses" industry has a mixed reputation — and honestly, some of it is deserved. While there are many legitimate cash home buyers providing a valuable service, there are also bad actors who prey on distressed homeowners. Knowing the difference can save you thousands of dollars and a lot of heartache.
Here's how to protect yourself.
The Most Common "We Buy Houses" Scams
Scam #1: The Bait-and-Switch Offer
How it works: A company makes an attractive initial offer — say $200,000 for your home. You accept, sign a contract, and start planning your move. Then, shortly before closing, they come back with "bad news" — they found issues during their inspection and the offer drops to $160,000. By now you've already committed emotionally and logistically, and they're banking on you feeling trapped into accepting.
How to spot it: Legitimate buyers do their homework before making an offer. If someone offers you a price without seeing the property or asking detailed questions about its condition, the number is likely inflated to hook you.
Protection: Get the offer in writing with specific language that the price is firm barring material misrepresentation. Legitimate buyers should stand behind their offers.
Scam #2: Upfront Fees
How it works: A company asks you to pay "processing fees," "appraisal fees," "earnest money," or other upfront charges before they'll make an offer or proceed with the purchase.
How to spot it: This one is simple — legitimate cash home buyers never charge sellers anything upfront. The seller should never pay a dime to sell their property to a cash buyer. Period.
Protection: If anyone asks for money before buying your house, walk away immediately.
Scam #3: Equity Stripping / Deed Theft
How it works: A scammer convinces a homeowner (often someone in foreclosure) to sign over the deed to the property with the promise that they'll "save the house" or "rent it back to you." The scammer then takes ownership, extracts the equity (through a refinance or sale), and the original owner is left with nothing.
How to spot it: Anyone who asks you to sign over your deed before you've received payment is running a scam. Legitimate transactions go through a title company or attorney, where the deed and money exchange simultaneously.
Protection: Never sign any document that transfers ownership without simultaneous payment through a licensed title company or closing attorney.
Scam #4: Lowball Predators
How it works: These aren't technically scams, but they're predatory. Some companies specifically target desperate homeowners — people in foreclosure, facing eviction, or dealing with emergencies — and make extremely low offers (40-50% of value) knowing the homeowner feels they have no choice.
How to spot it: Get multiple offers. If one company's offer is dramatically lower than others, they're taking advantage of your situation.
Protection: Always get at least 2-3 cash offers and compare. Also compare against a realistic traditional sale net sheet.
Scam #5: The Fake Company
How it works: A "company" with no physical office, no verifiable track record, and no real credentials poses as a cash buyer. They may use fake reviews, a slick website, and high-pressure tactics. Their goal is usually to get your property under contract and then wholesale it to an actual buyer (adding their markup) or worse, collect earnest money deposits and disappear.
How to spot it: No physical address, no BBB listing, no verifiable reviews on Google or other platforms, recently created website, and inability to show proof of funds.
10 Questions to Ask Any Cash Home Buyer
Before accepting any offer, ask these questions:
- 1"Can you show me proof of funds?" Legitimate buyers can show a bank statement or letter from their financial institution proving they have the cash to close.
- 1"How did you calculate your offer?" A reputable buyer should walk you through their comparable sales analysis, repair estimates, and the formula they used. Transparency is non-negotiable.
- 1"Is there any fee I need to pay?" The answer should always be no. Sellers pay nothing.
- 1"Will the closing go through a licensed title company?" It should. A title company or closing attorney protects both parties and ensures clean title transfer.
- 1"Can I see your reviews and references?" Check Google, BBB, and Trustpilot. Ask for references from recent sellers they've purchased from.
- 1"How long have you been in business?" Track record matters. Companies that have been operating for years with consistent reviews are far safer than fly-by-night operations.
- 1"What is your physical address?" Legitimate companies have offices. Visit if you can.
- 1"Is this offer firm, or can it change?" Get explicit written confirmation that the offer price is locked in.
- 1"Can I have my attorney review the contract?" Any company that discourages attorney review is a red flag. Legitimate buyers welcome it.
- 1"What happens if I change my mind?" Understand the cancellation terms in the contract. You should have the ability to cancel without penalty before closing.
How Legitimate Cash Buyers Operate
Here's what the process should look like with an honest, reputable cash home buyer:
- 1Initial contact: You submit your property info or call. The company asks detailed questions about the property condition, location, and your situation.
- 1Research and offer: The buyer analyzes comparable sales, assesses the property (virtually or in-person), and presents a written offer with a clear explanation of how the number was calculated.
- 1No pressure. You have time to think, compare options, and consult with anyone you trust. No deadlines, no "this offer expires in 24 hours" pressure.
- 1Contract through title company. All paperwork goes through a licensed title company or real estate attorney. You can have your own attorney review everything.
- 1You choose the closing date. The buyer works on your timeline, not theirs.
- 1Cash at closing. At the title company, you sign the deed, the buyer wires the funds, and you receive your money immediately.
- 1No fees or hidden costs. The offer price is the amount you receive. The buyer pays all closing costs.
This is exactly how we operate. Learn about our process in detail.
Additional Protections
Beyond asking the right questions, take these steps:
- Get everything in writing. Verbal promises mean nothing. Every term, condition, and price should be in the written contract.
- Use a real estate attorney. Even if your state doesn't require one, spending $500-$1,000 for attorney review of the contract is money well spent.
- Trust your instincts. If something feels wrong, it probably is. Legitimate buyers don't use high-pressure tactics.
- Report scams. If you encounter a scam, report it to your state's Attorney General office, the FTC, and the BBB.
Get a Legitimate Cash Offer
We've been buying houses for cash with complete transparency from day one. We'll show you the comps, walk you through our calculations, and give you a firm offer with no strings attached. Get your free offer here — and feel free to compare it against any other offer you receive.
Your financial security matters. Take the time to verify who you're working with, and never feel pressured into a decision that doesn't feel right.