How to vet a cash home buyer: a checklist

Short answer: ask for proof of funds, close only through a licensed title or escrow company you can verify yourself, expect an earnest money deposit held in escrow, never pay anything upfront, read the contract for escape clauses, and check reviews, the BBB and any state license.

1. Proof of funds. Ask for a recent bank or lender letter showing the buyer can close in cash. A "cash" buyer who needs to find financing or another buyer may not be a cash buyer.
2. A real title or escrow company. Look up the title company yourself and call it using a number you found independently. Closing and wire fraud are common; the CFPB explains how to protect closing funds: CFPB on mortgage closing scams. Industry body: American Land Title Association.
3. Earnest money. The contract should state a deposit amount, held by the title company, and when it becomes non-refundable. A tiny deposit with a long inspection period lets a buyer walk away easily.
4. Never pay upfront, and never sign over your deed early. The FTC warns that demands for upfront fees, payment by wire or cashier's check, and requests to transfer your deed are signs of a scam: FTC: Mortgage relief scams and FTC: Skip the scams when avoiding foreclosure.
5. Contract red flags. Watch for open-ended inspection or "subject to partner approval" clauses, an "and/or assigns" buyer name you were not told about (a wholesaler who may assign the contract), price reductions after inspection, and pressure to sign the same day. Have a real estate attorney review it if you are unsure.
6. Reviews. Read recent reviews on several sites, not only the buyer's own site. Look at how complaints were answered.
7. BBB. Search the company and check complaint history: Better Business Bureau.
8. State license where applicable. Many states do not license buyers who purchase for themselves, but anyone acting as an agent must be licensed. Find your state's real estate regulator via ARELLO, and your state attorney general for complaints.
9. Report problems. ReportFraud.ftc.gov and the CFPB fraud resources.

Then compare offers on net, not headline price, using the net proceeds calculator.

Frequently asked questions

Should a cash home buyer ever charge me a fee to make an offer?

No. Getting an offer should be free. The FTC warns that upfront fees are a common sign of a scam.

What is a wholesaler?

A wholesaler signs a contract to buy your house and then assigns it to another investor for a fee. It is legal in many states, but you should know if the buyer intends to assign the contract.