You've seen the signs on the utility poles and gotten the postcards. Some of those companies are exactly what they say. Some are wholesalers who will tie up your house and try to sell the contract to someone else. A few are scams. Here's how to tell the difference before you sign anything.
Three kinds of "we buy houses"
- Direct buyers. They have the cash (their own or a lender's), they close in their own name, and they own the house afterward. This is what we are.
- Wholesalers. They sign a contract with you, then market that contract to actual buyers for a fee. If they can't find one, they cancel, often the week before closing. Nothing illegal about it when done honestly, but many aren't upfront about it.
- Scams. Rare, but real. Watch for anyone who asks you to sign a deed before closing, wants to pay you outside a title company, or pressures you to sign on the spot.
Questions that sort them out
- Will you be closing in your own name, or assigning the contract? A direct buyer says their own name without hesitating.
- Where will we close? The answer should be a local title company or closing attorney. In Mobile and Baldwin County there are a dozen reputable ones.
- Can you show me proof of funds? A real buyer can produce a bank statement or a lender letter.
- How did you arrive at the price? A real buyer will show you the after-repair value, repair estimate, and margin.
- Can I talk to someone you've bought from? Yes should be the only answer.
- Are you licensed? Most cash buyers aren't required to be, but a licensed agent is bound by Alabama license law and can be reported to the Alabama Real Estate Commission. That's accountability you don't get from a phone number on a bandit sign.
Red flags
- The offer expires today.
- They want a long inspection period (30+ days) with the right to cancel for any reason. That's a wholesaler buying time to find a buyer.
- They can't tell you the name of the LLC that will be on the deed.
- They ask you to move out before closing.
- They want to pay in cash, literally. Real closings wire funds from escrow.
Green flags
- A written offer with the numbers explained.
- A short inspection period or none, because they already walked the house.
- A real earnest money deposit held by the title company.
- A local address and people you can meet.
- Reviews or references you can actually contact.
Where we stand
We're a husband-and-wife team based in Mobile, licensed Alabama real estate agents, and we close in our own name at local title companies. We put our numbers in writing and we're glad to connect you with past sellers. If you're weighing an offer from someone else, call us and we'll give you an honest second opinion, even if it's not us.