If you’ve gotten a postcard, a text, or a “We Buy Houses” call, it’s natural to wonder whether any of it is real. The short answer: many cash home buyers are legitimate businesses — but not all of them are, and the ones that aren’t can cost you a lot.

We’re a cash home buyer ourselves, so we’re not a neutral party. That’s exactly why we want to be straight with you. Below we’ll explain how the business actually works (including why cash offers are usually lower than retail), the scams you should know about, and how to check out any buyer — us included — using public records in California.

How Legitimate Cash Home Buyers Make Money

The most common reason people distrust cash buyers is that the offer is lower than what a fully fixed-up home would sell for. That part is true, and it’s worth understanding why.

A cash buyer who purchases a house as-is takes on costs and risks that a traditional buyer doesn’t:

• Repairs and updates — often the bulk of the cost on older or damaged homes.
• Holding costs — property taxes, insurance, utilities, and financing while the work gets done.
• Selling costs — when the home is eventually resold.
• Risk — surprises behind the walls, market changes, and delays.

A legitimate buyer builds those costs into the offer and still needs to make a profit. That’s not a scam; it’s how the business works. The question isn’t whether a cash offer is below retail — it usually is — but whether the trade-off (speed, certainty, no repairs, no showings, no commissions) is worth it for you. Sometimes it isn’t, and a good buyer will tell you so. Our Cash Offer vs. Listing guide walks through that decision honestly.

The Different Types of Cash Buyers

“Cash buyer” covers several very different kinds of businesses:

• Large national companies (iBuyers). Make offers online using pricing models and typically focus on homes in good condition. Often charge a service fee.
• Local investors and home-buying companies. Buy homes directly, often in any condition, and usually renovate, rebuild, rent, or resell them. This is what we are.
• Wholesalers. Put a home under contract and then assign that contract to another investor for a fee, rather than buying it themselves. This is legal when disclosed properly, but it means the person you’re negotiating with may not be the one who actually buys your home.
• Individual buyers. People who happen to have cash and want to live in or invest in the home.

None of these is automatically good or bad. What matters is whether the buyer is transparent about which one they are and can back up what they say.

Cash Home Buyer Scams to Know About

Most cash buyers are real businesses. But the speed and simplicity of cash sales also attract scammers, especially targeting people under stress — facing foreclosure, handling an estate, or going through a divorce. These are the schemes worth knowing:

Upfront fees

A buyer asks you to pay an “application fee,” “appraisal fee,” or “processing fee” before closing. A legitimate buyer pays you. They don’t charge you to make an offer.

Fake proof of funds

Some scammers show doctored bank statements to win your contract. Proof of funds should come from a verifiable source, and closing should happen through a licensed title or escrow company — so if the money isn’t real, the sale simply can’t close.

Wire fraud at closing

Criminals send emails that look like they’re from a title company, with “updated” wiring instructions. Never trust wiring instructions sent by email. Call your title company at a phone number you find independently — not one listed in the email — to confirm before any money moves.

Deed fraud

Someone forges documents to transfer your property’s title, most often targeting vacant homes or properties owned free and clear. Keep an eye on your property’s records, and if your county recorder offers a property fraud alert service, it’s worth signing up.

Foreclosure “rescue” and equity-stripping schemes

Someone promises to “save” your home — often asking you to sign over the deed with a promise that you can rent it back or buy it back later. Homeowners have lost their homes and all of their equity this way. California has specific laws protecting homeowners in foreclosure, including rules on foreclosure consultants and on sales of homes in foreclosure. If you’re in foreclosure, talk to a real estate attorney or a HUD-approved housing counselor before signing anything.

Bait-and-switch offers

A buyer makes a high offer to lock up your house, then drops the price at the last minute when you’re already committed. Ask up front what could change the price and get the answer in writing. (We cover this and more in Questions to Ask a Cash Home Buyer Before Accepting an Offer.)

How to Verify a Cash Buyer in California

You don’t have to take anyone’s word for it — including ours. Most of what you need to check is public:

1. Look up the business. Use the California Secretary of State’s online business search to confirm the company is registered and active. A registered business with a real address is a basic baseline.
2. Check their purchase history. Real estate transactions are public record. Your county recorder or assessor, or a title company, can show whether a buyer has actually purchased homes before.
3. Read reviews from real sellers. Look for reviews on independent platforms (like Google) with specific details, not just generic praise.
4. Ask for proof of funds — and make sure the transaction closes through a licensed, independent title or escrow company that you can verify.
5. Check any license claims. If someone says they’re a licensed real estate agent or broker, you can confirm it on the California Department of Real Estate’s license lookup. (Note: investors buying homes for themselves generally don’t need a real estate license, so “no license” isn’t a red flag on its own — but a false license claim is.)
6. Search the name with the word “scam” or “complaints.” It takes 30 seconds and can surface problems quickly.
7. Get the contract reviewed. A real estate attorney or trusted advisor can review the agreement before you sign. A legitimate buyer won’t object.

We cover more warning signs in What to Avoid with We Buy Houses Companies in California.

How We Answer the “Is It Legit?” Question

Since we’re asking you to verify buyers, here’s how we hold up to the same checklist:

• We’re the actual buyer. We close on every home ourselves — we don’t assign your contract to someone else.
• We’ve been buying since 2003 — 23 years — and have purchased more than 200 homes in California. You can read about us and see reviews from past sellers.
• Proof of funds comes with our offer. Our purchases are funded through our own capital and an established private lender.
• No upfront fees, ever. You don’t pay a commission, and we cover the typical closing costs.
• Everything closes through a licensed title or escrow company, so your money and your deed are handled by a neutral third party.
• We’ll explain how we got to our number and tell you honestly when listing your home might get you more.

You can see our full process on the How It Works page.

Frequently Asked Questions

Talk to a Buyer Who Welcomes Your Questions

If you’re considering a cash sale, the best buyer is one who’s glad you’re checking. We’re happy to answer every question, show you proof of funds, and give you a free, no-obligation cash offer you can compare against your other options — with no pressure to accept.

Call Lawrence at (510) 824-8710, or request your free cash offer online.