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Are cash home buyers legit? Here's how to tell.
Most are real businesses, and a few aren't. Here's how cash offers are priced, what a good buyer does, and the red flags that should make you walk away. It applies to every buyer, including us.
How offers are priced
Why a cash offer is lower than a listing price.
A cash buyer's offer is usually below what the house might sell for after repairs and months on the market. The difference pays for the repairs, holding costs, closing costs and the buyer's risk. In exchange, you skip agent commissions, repairs, cleanout, showings and waiting. Whether it's worth it depends on your situation and what you'd actually net either way.
Signs of a good buyer
What a legitimate buyer does.
- Puts the offer in writing, with the price and who pays which costs.
- Closes through a licensed title company or attorney, which handles the money and records the deed.
- Never asks you for money up front.
- Gives you time to think it over, with no pressure.
- Has a real track record: a local address, reviews you can read, a BBB profile.
Red flags
Walk away if you see these.
- Asks for an application fee, deposit or any money from you.
- Pressures you to sign today, or won't put the offer in writing.
- Asks you to sign a deed or power of attorney anywhere other than a closing with a title company or attorney.
- Tells you to stop paying your mortgage or taxes, or promises to “save” your house while you rent it back.
- Has no address, no reviews, and no way to check who they are.
Questions
Common questions
Are cash home buyers legitimate?
Many are real local businesses that buy houses as-is. A legitimate buyer puts the offer in writing, closes through a licensed title company or attorney, never asks you for money, and gives you time to review the contract.
Why do cash buyers offer less than market value?
The offer reflects the repairs, holding costs, closing costs and risk the buyer takes on. In exchange, the seller usually skips commissions, repairs, cleanout and months of waiting.
How do I avoid a home-buying scam?
Never pay a buyer anything, never sign a deed outside a closing run by a title company or attorney, get every offer in writing, and check reviews and the BBB.
Is Gembrook Home Buyers legitimate?
Gembrook Home Buyers is a trade name of a Toms River, New Jersey company that's BBB accredited with an A+ rating. Every offer is in writing, closings go through a title company, and sellers never pay us anything.
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General information only, not legal, tax or financial advice. Every situation is different.