How to check that a cash home buyer is legit (and avoid foreclosure-rescue scams)
Short answer
A legitimate cash home buyer puts the offer in writing, never asks you for money up front, closes through an independent title company or attorney you can verify, and doesn't ask you to sign your deed over before closing. If anyone asks for an upfront fee to save your home, or offers to let you rent it back after you sign over the deed, treat it as a warning sign.
Red flags
| Red flag | Why it matters | Source |
|---|---|---|
| An upfront fee to "save" your home | Mortgage relief companies can't collect fees until you have a written offer from your lender that you accept | CFPB, FTC |
| "Sign the deed over to us now" | Transferring the deed doesn't transfer the mortgage; you can lose the home and still owe the loan | FTC |
| Rent-back or buy-back promises | The scammer may raise the rent, evict you after missed payments and keep your equity | FTC |
| "Stop talking to your lender" | Companies that tell you to stop communicating with your lender are breaking the law | FTC |
| Pay your mortgage to them instead | A listed sign of a loan modification scam | CFPB |
| Payment only by wire, cashier's check or app | These are hard to get back | FTC |
| A guarantee to stop foreclosure | "No one can guarantee they can make the lender stop foreclosure. That's always a scam." | FTC |
| A rushed stack of papers | A deed can be buried in a "rescue loan" package | FTC |
A real buyer pays you at closing. You shouldn't pay a buyer anything to receive an offer, and no one needs your deed before the closing itself.
Ask for proof of funds and an independent settlement office
Before you sign, ask for three things in writing:
- Proof of funds. A recent bank statement or letter showing the buyer can pay the price. Check that the account holder matches the buyer named in the contract.
- The title company or attorney handling closing. Look up its phone number yourself and call to confirm it has the file. New Jersey's rescue-fraud law, for example, requires certain distressed-property sales to close at a licensed title insurance producer's office or a New Jersey attorney's office (N.J.S.A. 46:10B-64).
- A complete contract. It should list the price, who pays closing costs and transfer tax, the closing date, and what happens to your deposit if the buyer backs out.
Take your time. A buyer who needs your signature today, won't put the offer in writing, or won't let your own attorney review the contract is giving you a reason to walk away. Read the contract for terms that let the buyer cancel for almost any reason or lower the price after an inspection, and ask how the deposit is held. If you're in foreclosure, keep talking to your servicer while you compare offers; a sale doesn't stop the foreclosure until it closes.
Then ask for a payoff statement from your servicer so you can see what you'll actually take home. See cash buyer vs realtor vs iBuyer for comparing offers on a net basis.
Check the business registration
Each state lets you look up a business entity for free. Check that the company named on the contract exists, is active, and matches the name on the proof of funds.
- Pennsylvania: Department of State business search
- New Jersey: business name search on the state business portal
- Delaware: Division of Corporations entity search
- Florida: Division of Corporations Sunbiz search
Registration shows a company exists. It doesn't prove it's honest, so combine it with the other checks.
State foreclosure-rescue laws
- New Jersey. Foreclosure consultants need a license from the Commissioner of Banking and Insurance (N.J.S.A. 46:10B-55). Their contracts must tell you they can't take money until they've finished everything promised (46:10B-56). In a deed transfer involving a consultant, the owner can cancel until midnight of the 10th business day after signing or the sheriff's sale, whichever is first (46:10B-61), and must receive at least 82% of fair market value (46:10B-64). The law covers owner-occupied 1–4 unit homes in foreclosure or more than 90 days behind (46:10B-54).
- Delaware. Under the Mortgage Rescue Fraud Protection Act, a foreclosure consultant can't collect any compensation until it has fully performed every promised service, or acquire an interest in the house of a homeowner it has contracted with (6 Del. C. § 2415B). In a reconveyance, the homeowner can rescind the deed transfer until midnight of the third business day after signing (§ 2423B).
- Florida. A foreclosure-rescue consultant needs a written agreement, can't collect payment before completing all services, and the homeowner can cancel within 3 business days. In a rescue transaction where the homeowner keeps an interest, such as a lease option, the homeowner can cancel until 5 p.m. on the third business day (Fla. Stat. § 501.1377).
- Pennsylvania. File complaints about suspected scams with the Office of Attorney General.
These laws mostly target "rescue" deals where you're promised you can stay or buy the house back. A straightforward sale in which you move out and get paid at closing is a different transaction, but the same red flags apply.
Where to report a scam
- Federal Trade Commission: ReportFraud.ftc.gov
- Consumer Financial Protection Bureau: submit a complaint
- Pennsylvania: Office of Attorney General
- New Jersey: Division of Consumer Affairs
- Delaware: Department of Justice, Consumer Protection Unit
- Florida: Attorney General, Consumer Protection
For free advice on foreclosure options, use a HUD-approved housing counselor.
What our process looks like
We make a written, no-obligation cash offer. We don't charge fees or commissions, we buy as-is, and closing is handled through a licensed title company on a date you choose. You're welcome to run every check on this page on us, and to have your own attorney review the contract. If you're behind on payments, see short sale vs deed in lieu vs cash sale or our pages for Philadelphia, Trenton, Wilmington and Tampa.
Frequently asked questions
Are "we buy houses" companies legit?
You can't tell from an ad, so verify any buyer. Get the offer in writing, ask for proof of funds, confirm the title company or attorney independently, check the business registration, and never pay a fee or sign over your deed before closing.
Should I ever pay a cash buyer an upfront fee?
No. A buyer pays you at closing. Separately, federal rules make it illegal for mortgage relief companies to charge upfront fees for promises to help with your mortgage.
What is a foreclosure-rescue scam?
A scheme that promises to save your home, often by having you sign the deed over and rent it back. The FTC warns that the scammer can sell the home, keep your equity and evict you, while you still owe the mortgage.
How do I check a cash buyer's proof of funds?
Ask for a recent bank statement or letter showing enough funds for the price, and check that the account holder matches the buyer named in the contract. Confirm the closing office independently.
Can I cancel a foreclosure-rescue deal?
Often, yes. New Jersey allows cancellation of certain deed transfers involving a foreclosure consultant within 10 business days, Delaware allows rescission of reconveyance deals within three business days, and Florida gives cancellation rights for rescue agreements and transactions. Talk to an attorney right away.
Where do I report a suspected home-buying scam?
Report it to the FTC at ReportFraud.ftc.gov, the CFPB, and your state: the Pennsylvania Office of Attorney General, the New Jersey Division of Consumer Affairs, the Delaware Department of Justice Consumer Protection Unit or the Florida Attorney General.
Sources
- Federal Trade Commission, Mortgage Relief Scams and Trouble Paying Your Mortgage or Facing Foreclosure?
- Consumer Financial Protection Bureau, What are mortgage loan modification scams?
- New Jersey Statutes, Foreclosure Rescue Fraud Prevention Act: 46:10B-54, -55, -56, -61, -64
- Delaware Code, Title 6, Chapter 24B (Mortgage Rescue Fraud Protection Act)
- Florida Statutes, § 501.1377
- Business searches: Pennsylvania Department of State, New Jersey, Delaware Division of Corporations, Florida Division of Corporations
This is general information, not legal or tax advice. Whether a state rescue-fraud law applies depends on the transaction. If you think you've been targeted, contact your state attorney general or consumer affairs office, and talk to an attorney or a HUD-approved housing counselor before you sign anything.