Is We Buy Houses a scam?
Usually not, and that is a less comforting answer than it sounds. The letter in your mailbox tells you almost nothing about who sent it, and there are four different kinds of sender behind identical envelopes. Knowing which one you are talking to is the whole game.
| Who sent the letter | How they make money | What it costs you |
|---|---|---|
| A real cash buyer | Buys with their own funds, then repairs and resells or rents it | A price below retail, in exchange for certainty and speed |
| A wholesaler | Locks your house under contract, then sells that contract to an investor for a fee | Time, a renegotiated price, and the risk they never find their buyer |
| A lead broker | Sells your address and phone number to several investors at once | Your privacy, and a run of calls that does not stop |
| An actual fraud | Fees before closing, a deed signed away, or intercepted wire instructions | Your money, or your house |
The wholesaler tells, and where to find them
Nothing in this section is illegal. Wholesaling is a real business and some wholesalers are straight with people about what they do. The problem is that a wholesale contract and a purchase contract look identical to a seller reading one at the kitchen table, and only one of them ends with the person in front of you buying your house.
- And/or assigns beside the buyer's name. Four small words giving permission to hand your contract to somebody else. Ask for them to be struck out and watch what happens.
- An assignment clause. Sometimes a full paragraph, sometimes a line buried in the addenda. It says the same thing.
- A long inspection or due diligence period. Ten, fourteen, or twenty-one days. That window is time to go and find their buyer, and it is when the price gets renegotiated.
- Earnest money that is tiny, or not deposited until after inspection. A few hundred dollars held nowhere is a placeholder. It costs them nothing to walk.
- No proof of funds, or a balance screenshot with no name on it. Ask for a bank letter naming the entity signing the contract.
- Photographers and partners who need to walk the house. Those are prospective buyers being shown your property before anyone owns it.
- A closing date that slips once, then again. The first slip is the signal. A buyer with their own money does not need an extension.
Four things a real cash buyer does without being asked
- 1Shows proof of funds with their name on it
A bank or attorney letter naming the buying entity, dated recently. A screenshot off somebody's phone does not count.
- 2Names the title company on day one
A specific licensed title company or real estate attorney in Miami-Dade, that you can telephone yourself before you sign anything.
- 3Puts your closing date in the contract and keeps it
You pick the date. It goes in writing. A buyer using their own funds has nothing to wait for.
- 4Itemises your net in writing
Sale price, lien and tax payoffs, title costs, and the figure that reaches you. If a buyer cannot produce that page, they do not know their own numbers.
Actual fraud, and the shapes it takes
Rarer than wholesaling, and far more serious. Every version of it needs you to do one of three things, so the defenses are simple.
- Any fee before closing. Application fee, appraisal fee, processing fee, document fee, expedite fee. A buyer pays you. Money moving the other way before closing is the signal.
- A deed signed anywhere but a closing table. If you are asked to sign a quit claim deed in advance, at your kitchen table, to get the file started, stop. That document transfers your house, and there is no legitimate reason to sign it early.
- Wiring instructions that change. Instructions sent or amended by email are the most common real estate fraud there is. Call the title company on a number you looked up independently and confirm the details by voice before any money moves.
- We will take over your payments. Without a recorded payoff, the mortgage stays in your name and your credit while somebody else lives in the house. If this is on the table, get an attorney to read it first.
- Pressure and a same-day deadline. Your situation may be urgent. The signature is not. An offer that evaporates because you slept on it tells you what it was worth.
How to verify anyone in fifteen minutes
- 1Look the company up on Sunbiz
Florida's Division of Corporations at sunbiz.org lists every registered entity, its officers, its address, and the date it was formed. An entity formed six weeks ago that claims hundreds of purchases is telling you something.
- 2Search the Clerk's Official Records by their name
Go to onlineservices.miamidadeclerk.gov/officialrecords and search by party name. Deeds are public. A company buying houses in Miami-Dade has its name on recorded deeds here. An empty search is an answer.
- 3Call the title company directly
Look the number up yourself rather than using the one in the email. Ask whether they have closed for this buyer before. Title companies answer that question.
- 4Ask for the last three closings
Addresses and dates. You can check every one of them against the Official Records in a few minutes. A real buyer offers this before you ask.
- 5Read the name on the contract
The entity buying should be the entity you verified. If a different name appears at signing, or the name is left blank, stop and ask why.
Where we sit, and how to check us
We are the buyer. We buy in Miami-Dade with our own funds and close at a licensed title company, with our name on the deed afterwards. Every check in the section above applies to us as much as to anyone who mailed you.
- We do not assign contracts. The name on the contract is the name that ends up on the deed.
- We name the title company before you sign, and you are welcome to call them first.
- We do not ask you for a fee. Not for the survey, and not for paperwork.
- You pick the closing date and it goes in the contract.
- Check us the way you would check anyone. Every deed we buy is filed in the Miami-Dade Official Records under the same name that will be on your contract. Search that name yourself, pull our last few closings, and read them. We will hand you the name before you sign so you can look first.
And a fair warning about our own side of it. A cash offer is below retail, because the buyer carries the repairs, the months, and the risk that the resale drags on. If your house is in decent shape and you have three months and the patience for showings, listing it will usually net you more, and we will tell you so. The arithmetic is laid out in how much cash home buyers pay.
What to do with the letter in your hand
- 1Do not call the number on it first
Look the company up on Sunbiz and in the Official Records before you speak to anyone. Five minutes, and it changes the conversation.
- 2Ask the assignment question
Are you buying this yourself, or assigning the contract? One word is the correct length of that answer.
- 3Ask for proof of funds and the title company
Both before you sign, both in writing. A real buyer has them on hand already.
- 4Get a second offer
It costs nothing and it takes a day. It is also the fastest way to find out whether the first number was real.
- 5Read the contract for the four small words
And/or assigns. If they are there, you now know exactly what you are being offered.
Get an offer you can check line by line
Proof of funds, the title company named up front, your closing date in the contract, and your net itemised on one page. Nothing to pay, and no contract handed off to somebody else.
Get my cash offer