Avoid Scams

Common cash buyer scams and red flags

Most cash buyers are legitimate, but the market also attracts bad actors who rely on urgency and confusion. These are the patterns we see most often:

• Proof of funds that never arrives. A real buyer can show a verifiable letter from a bank or title company. See how to spot cash home buyer scams.
• The late price cut. A strong offer that drops sharply near closing. Read how the bait-and-switch works.
• Assignment clauses. A "buyer" who is really a wholesaler may assign your contract to someone else, often for a fee you never see.
• Pressure and upfront fees. Artificial deadlines, or any request that you pay money before closing, are warning signs.
• Unfamiliar title or escrow companies. Choose your own title company or attorney whenever you can.

How to verify a buyer before you sign

1. Ask who will actually buy the house and who will provide the funds.
2. Request proof of funds and confirm it directly with the issuing bank or title company.
3. Check the business with your state’s Secretary of State and review complaints with the Better Business Bureau and your state attorney general.
4. Read the contract for assignment, inspection and cancellation clauses, and have an attorney review it.
5. Compare at least two or three offers by net proceeds, not headline price.

If you think you have been targeted

Report it to the Federal Trade Commission, your state attorney general and local law enforcement. If money was wired, contact your bank immediately and file a report with the FBI Internet Crime Complaint Center. Our guides below explain each scam in detail.

General information only, not legal or financial advice. Rules vary by state, so consult a licensed attorney before signing a contract. See our editorial policy.