Are We Buy Houses Companies Legit?

Are we buy houses companies legit? Plenty are. A funded investor who closes in their own name and can prove it runs a real business, and for a seller with a hard house or a hard deadline, a useful one. The trouble is that the same bandit signs and postcards also advertise a second kind of operator, one who never plans to buy your house at all. Telling the two apart takes maybe ten minutes once you know where to look. This guide gives you the tells, the questions, and the places to complain if someone's already crossed a line.

One disclosure before we start. We run a referral network in this exact industry, so we have a rooting interest in you learning this material. A seller who checks proof of funds is a seller our buyers never lose, and the operators described below are our competition. Read everything here with that in mind.

One Yard Sign, Two Business Models

The honest version works like this. An investor with cash on hand, or a hard-money lender behind them, offers a below-retail price that reflects repairs and their profit. You sign, a title company opens escrow, and the deed records in the buyer's name two or three weeks later. Every part of that story can be verified before you sign, starting with the money and the entity named on the contract.

The other version is wholesaling. A wholesaler gets you to sign a purchase agreement, usually at the lowest price you'll tolerate, with two quiet features built in: the words "and/or assigns" after the buyer's name, and an escape hatch dressed up as an inspection period. Then they shop your signed contract to actual investors and keep the markup, commonly $5,000 to $15,000, sometimes far more. If nobody bites before the hatch closes, they cancel and walk. You get your house back a month older, and losing their $100 deposit barely stings.

Wholesaling isn't automatically illegal. A growing list of states requires wholesalers to hold a license or to disclose in writing that they're selling a contract rather than buying a home, and a disclosed, professionally run assignment can close without drama. But the model's incentives invite games. And the games always run in one direction, away from you.

The Red Flags, in the Order They Usually Appear

A pen in your hand on the first visit

Same-day signature pressure is the single most reliable tell. "This price is only good today" isn't how anyone with real money behaves, because a funded buyer's math doesn't change overnight. The pressure exists to beat your second opinion. A legitimate investor expects you to sit with an offer for a few days and compare it against others. If a deal dies because you slept on it, it was never a deal.

Earnest money that wouldn't fill your gas tank

The deposit is the buyer's skin in the game. Serious purchasers put down $1,000 to $5,000 and agree it goes hard, meaning nonrefundable, once their short inspection window ends. A $50 deposit means backing out costs them lunch money. You've handed over a locked-in price on your biggest asset. They've handed over almost nothing. That imbalance is the entire foundation of the contract-flipping business.

Proof of funds that never quite shows up

Ask to see money before you sign anything: a bank statement, or a letter from a hard-money lender, dated inside the last 30 days. Real buyers produce this without friction because they get asked constantly. Stalling sounds like "our funds are tied up in another closing" or "the letter comes after we're under contract." Both translate the same way. The money that buys your house doesn't exist yet, and might never.

An inspection period you could park a truck in

Every buyer deserves a look at the house, and five to ten days covers it. A 30-day window with the right to cancel for any reason isn't an inspection. It's a free option on your property while somebody shops it. Watch for extension games too, where the buyer needs "just one more week" while their real search continues. Each extension costs them nothing and costs you market time you can't get back.

Three little words: and/or assigns

That phrase after the buyer's name lets them hand your contract to anyone. You won't know who actually shows up at closing, or if anyone does. Crossing it out is allowed. A buyer who refuses to close in their own name just explained their business model, and you're free to price that honesty however you like.

Seven Questions That Sort Buyers Fast

1. "Are you buying this house yourself, or assigning the contract?" Listen for a straight answer. Hedging here predicts hedging everywhere.
2. "Can I see proof of funds dated this month?" The only acceptable answer is yes, followed by a document.
3. "How much is your earnest money, and when does it become nonrefundable?" You want four figures and a date, not a shrug.
4. "How long is your inspection period?" Anything past ten days needs a reason they'd repeat with a straight face.
5. "What are the last three addresses you closed on?" Deeds are public record, so ten minutes on your county recorder's website confirms the answer or destroys it.
6. "Who pays closing costs?" Most legitimate investors cover the standard costs on both sides. Get it into the contract, not just the conversation.
7. "What happens if you miss the closing date?" The grown-up answer involves forfeiting their deposit. The amateur answer involves an extension.

Nobody honest is offended by this list. Buyers in our network field versions of it every week, and the best ones treat it as a chance to show off.

How Referral Services Like This One Get Paid

Since we're teaching you to interrogate everyone else's business model, here's ours with the lights on. Nobody at Maria Mercedes Home Solutions buys houses. When you call, we match you with an investor from a network we screen ourselves, and if that introduction ends in a closed sale, the investor pays us a referral fee. You pay nothing at any point. The fee is the buyer's marketing expense, not a deduction from your proceeds.

Notice what that structure does to our incentives. We only earn when a deal actually closes, so contract flippers who tie up houses and vanish are worthless to us. The screening starts with current proof of funds and a record of purchases deeded in the buyer's own name. Assignment clauses end the conversation. Our about page lays out the whole arrangement, and you should ask us the seven questions above too. Fair is fair.

Who Gets Targeted, and Where

Contract flippers hunt where sellers feel stuck and prices run low. Tired landlords top the list, because an out-of-state owner with a rough tenant will sign almost anything that promises an exit. If that's you, read about selling a rental with the tenants still in place before talking to anyone. Legitimate investors buy occupied rentals all the time and don't need you desperate to do it. Heirs settling estates and owners holding a foreclosure notice get the same flood of calls, for the same reason. Distress looks like opportunity to the wrong people.

Geography matters as much as circumstance. Low price-point metros draw the heaviest wholesaler traffic because a cheap house means a cheap option. Midwest markets are a favorite, and our page on getting a fast sale done in Indiana covers how to sort real Indianapolis buyers from the sign-on-a-telephone-pole crowd.

Where to Check, and Where to Complain

Two free resources do most of the protective work. The Federal Trade Commission's consumer site at consumer.ftc.gov publishes plain-English guidance on home sale fraud and takes reports that feed real enforcement. And every state attorney general operates a consumer protection division that handles deceptive real estate practices; find yours through the state attorney general directory at usa.gov. A wholesaler who misrepresented what they were or who won't release a canceled contract is exactly the complaint those offices want to hear.

Filing also protects the next seller, which matters more than it sounds. These operators burn through a neighborhood and move on, and the paper trail from your file is often what lets a state finally act.

Legitimacy Questions Sellers Ask Us