If you own a house, you probably get postcards, texts and calls from people who want to buy it for cash. Many are legitimate companies. Some are not, and a few are outright scams. Selling for cash can be a good decision, but only if you know how to tell the difference. This is the checklist we would want our own family to use, including on us.
Red flags
Walk away from anyone who asks you for money up front, such as an application, processing or inspection fee. Never sign over your deed outside of a proper closing with a title company or attorney; foreclosure rescue scams often start with a request to transfer the deed, and getting it back is very difficult. Be wary of pressure to sign the same day, refusal to let you have an attorney or family member review the contract, promises of top dollar for a house that needs major work, and a buyer you cannot find any real record of online.
Ask who will actually close
Some cash buyers buy and renovate houses themselves. Others put a house under contract and then assign that contract to another investor for a fee, which is called wholesaling. Assignment is legal in many places when properly disclosed, but you deserve to know. Ask directly: will you be the buyer at closing, or might you assign this contract? Is there earnest money, how much, and who holds it? Can you back out, and under what conditions? A good buyer answers plainly and puts it in the contract.
Check proof of funds and track record
Ask for proof of funds or a lender letter. Ask for the name of the title company or closing attorney they use, and call them. Look up the company's business registration with the state, read reviews from sellers, and ask for references from people they have bought from. A real buyer will not be offended.
What a legitimate cash sale looks like
There is a written purchase agreement with the price, closing date and any conditions spelled out. A title company or closing attorney handles the money and the deed. Your mortgage and any liens are paid off from the proceeds. You get a settlement statement showing every dollar, and you are paid at closing. You choose the closing date within what the contract allows.
Be realistic about price
A cash buyer who renovates has to pay for repairs, carrying costs, resale costs and the risk of surprises, so an as-is cash offer will usually be below what a fully renovated house would sell for. That is normal and honest. The real comparison is what you would net by listing after commissions, repairs and months of carrying costs. Get more than one offer, and run the numbers both ways. We put our costs in writing so you can compare.