Are “We Buy Houses” companies scams?
You've seen the signs stapled to telephone poles: "We buy houses, cash, any condition." Most lead to real companies. A few don't, and real estate scams cost Americans hundreds of millions of dollars a year.
Learn how to tell a legitimate one from the rest before you sign anything.
- Real scams involve: upfront-fee schemes, fake checks, wire fraud, or someone impersonating a person or company involved in your sale.
- Predatory practices can still be legal: bait-and-switch pricing, pressure tactics, or contract terms designed to give the buyer leverage after you sign.
- Buyer failure: a real buyer can still waste your time if they lack the money or expertise to actually close.
- A low offer is different: if the price and terms are clear and you can walk away, a disappointing offer is not itself a scam.
- Verify before you sign: check the company’s history and independent reviews, ask for proof of funds, understand what can change the offer, and read the contract and every addendum
What "scam" actually means in this industry
The word scam gets used for almost every bad experience with a cash buyer. But they are not the same thing.
A scam uses false pretenses to take something from you. The person or transaction is not what it claims to be. Impersonation, fake checks, fraudulent fees, and redirected closing funds belong here.
A predatory deal uses your commitment against you. Examples are bait-and-switch pricing, exploding offers that expire quickly, or contract terms that give the buyer leverage after you sign. A TREC contract gives you a standardized starting point, making unusual terms easier to spot before you sign.
An unreliable buyer may simply fail to close. They may lack the funding, experience, or ability to solve the problems that come up. That can cost you time and money, but failure is not automatically fraud.
A low offer may be an offer you don’t like, but that doesn't make it fraud. If the terms are clear and you are free to say no, the price alone does not make it a scam.
A scam deceives you to take something from you. Predatory terms trap you after you commit. An unreliable buyer fails to perform. A low offer can be rejected.
What actual fraud looks like
Real fraud is different from a low offer or a bad contract. Someone is trying to take your money, intercept the transaction, or deceive you about who they are.
They ask you to pay them before closing. A processing fee, application fee, or deposit paid to the buyer just to receive an offer or keep the deal moving is a warning. No legitimate buyer charges you to receive an offer.
They send a cashier's check and ask for part of it back. Cashier's checks look like they clear immediately. The buyer overpays, asks you to wire back the difference, and the check bounces a week later. The money you sent is gone. Never send money back to a buyer until your bank confirms the funds are real, not just available.
They impersonate someone involved in your sale. A scammer may claim to work with a buyer or company you already know, then send a different offer or contract. If someone new contacts you claiming to be affiliated with a company you’re already working with, verify it through the contact information you already have before signing or responding.
Inherited homes can create additional opportunities for scams involving heirs, probate, and title. Home investor scams targeting heirs covers how that works.
It can happen mid-deal...
SELLER SCAM STORY
Our seller had already met with a Big State advisor in person, received an offer, and was taking time to think it over. During that window, she received a call from someone claiming to work with us, but with a better deal to offer. All she needed to do was sign the new contract that he was sending over.
She called our office to confirm. No one on our team had made that call or sent any contract.
If you are already working with a buyer and receive contact from someone claiming to be affiliated with them, always call your original contact directly before responding to anything.
Predatory practices: legal, but walk away
The buyer is real and the intent is to close, but the terms are built for the buyer.
Bait and switch. A high number gets you under contract, but the buyer is vague about what could still change it. A preliminary or contingent offer can legitimately change when new information comes up. The red flag is presenting a number as firm, then using expected repairs or conditions to cut it after you've committed.
Contract terms that can tie up your property. Some buyers record a memorandum or other notice of their contract interest. That can complicate another sale until the interest is released or otherwise resolved. Read every contract before you sign it. If a clause is unclear, ask a real estate attorney what it does.
If you already have another written offer, our home advisors work alongside our in-house curative title team to help you compare the terms, spot red flags, and know what questions to ask before you sign.
Before you compare the number, verify the company behind it.
How to verify a cash buyer before you sign anything
Three steps, under 30 minutes.
1. Search the company where reviews are tied to a real place.
Google Maps, the BBB, Trustpilot. Reviews attached to a physical address are harder to fabricate than testimonials on a company's own website. Look at volume, how old the reviews are, and how the company answers the critical ones. If you find nothing, or a website registered three months ago, that matters.
2. Read the BBB profile.
Accreditation, how long they have held it, complaint history, and how complaints were resolved. Accreditation maintained over years means adhering to a standard most buyers never do.
3. Ask for proof of funds before you sign anything.
A legitimate cash buyer has it ready. A buyer who will not produce it has told you something.
What a legitimate transaction looks like
Once the company checks out, look at the deal itself.
- A legitimate buyer is clear about what the offer is based on. — Some buyers may make a preliminary or contingent offer before seeing the home. What matters is that they tell you what still needs to be verified and what could change the number.
- We tell you upfront what our offer is based on and explain exactly what happens next. - A legitimate buyer gives you a contract you can identify and understand. — The Texas Real Estate Commission publishes standardized residential contracts that protect both sides. A different contract is not automatically a scam, but the buyer should be able to explain why they're using it and you should have unclear terms reviewed.
- We use TREC contracts and show you what you're agreeing to. - A legitimate buyer follows through on earnest money. — Earnest money is one sign that a buyer has something at stake. If the contract calls for it, make sure it is actually deposited with the escrow agent.
- We put down earnest money on every contract we sign. - A legitimate buyer does not charge you upfront fees. — Mortgages, liens, taxes, and other amounts may still be paid from your proceeds at closing. Those are different from paying a buyer upfront.
- We charge sellers nothing to receive or consider an offer, and we explain what will be paid at closing. - A legitimate buyer answers your questions before asking for anything. — The first conversation should be about your situation and how we can help, not about moving you toward a signature.
- Your first call with us is about your house and what you are dealing with. There is nothing to sign and no commitment.
You should verify us, too.
Hold Big State to the same standard. We have two physical offices in Texas, an A+ BBB rating held for over a decade, public reviews on Google and Trustpilot, and have helped more than 10,000 Texas sellers.
Go ahead and read the bad reviews, too. We answer them all.
If you're not ready to talk with anyone yet, our FAQ covers the questions sellers ask us most often.
TALK TO US
When you’re ready to talk, start here.
You don't have to have everything figured out before you call. If you're in Houston or DFW and want to know what a cash sale looks like for you, let's talk.
You're not committing to anything. You're just getting clarity.
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