House For Sale Real Estate Sign in Front of a House.

We Buy Houses Companies: Are They Legit Or A Scam?

You’ve most likely come across a “We Buy Houses” sign which can be found on community bulletin boards, yard signs, telephone poles, and billboards. And this shouldn’t be surprising since these signs are everywhere nowadays. These companies promise homeowners to find a buyer within the shortest time possible.

But is there a catch? This is what you might be asking yourself since all this might appear somewhat too good to be true. If you have such concerns, here’s an informative guide on “We Buy Houses” companies to know if they’re legit.

What Are “We Buy Houses” Companies?

Before diving deeper into whether these companies are legit, you first need to understand what these companies are.  These we buy houses companies are businesses that specialize in purchasing home for quick cash. Once payment for the house is made, these companies repair and renovate and then sell it for a greater profit.

But before making the purchase, the house will be carefully inspected to determine how much they should pay. And because these companies are looking to make huge profits from filliping your house, they usually only pay between 50% to 70% of your house’s value. This means you’ll be selling your home for a loss, so you shouldn’t consider this option not unless you’re desperate.

Are “We Buy Houses” Companies Legit?

Yes, these companies are legit. However, you need to remain vigilant to avoid getting scammed before deciding to go with a local or regional firm. This is especially important when dealing with a local firm, unlike with the regional companies, which most are legit. You should be wary of these local firms since they work as brokers or wholesalers between cash buyers and home sellers.

You must do your due diligence to avoid getting conned. And as you do this, there are several tips to confirm the company’s validity, including;

  • Request for the company’s full legal name and they state it was registered. This business should either be a C-Corp, S-Corp, or an LLC.
  • Request to get the full name of the company owner(s).
  • Request for the names of any other party that will be involved in the sale and their role.
  • Google search the company name, the names of its owners, and names of any other persons involved in the deal.
  • Search on your County and State law/justice enforcement sites to find whether there are any settled or pending lawsuits and any other court-related matter that involves the persons you’re dealing with.

You should never overlook the importance of taking these measures to avoid becoming a victim to an unscrupulous dealer. With this research done, you’ll be able to determine whether or not to proceed with the deal.

Sale Pending Real Estate Sign

Types of “We Buy Houses “Companies

These house flipping companies fall into three categories which are;

  • House Flippers: These companies buy homes on sale that are in deplorable conditions at low prices. They then go ahead and fix these houses and sell them for greater return on their investment. 
  • Buy and hold real estate investors: The goal of these companies buying houses is to convert them into rental property. Once they own the home, they rent it out and wait for the house’s value to increase. Once it does, they sell it for a profit. The best thing about buying and hold real estate investors is that they’re willing to pay better for your house, unlike with house flippers. 
  • iBuyers: These are companies that purchase many properties and sell them in the future for a profit. They typically only make a small profit on these houses since they can make offers up to 98% of the house’s actual value. And when determining how much to pay for your home, they use automated valuation models (AVMs). But despite paying more for the house, they require to pay for costs such as utilities, HOA fees, repairs, and taxes. 

What Ate The Advantages of “We Buy Houses” Companies?

Several advantages and disadvantages of selling your house to a “we buy houses” companies. Here’s an overview of what to expect.


  • Greater certainty: Unlike with selling your house directly to a buyer, the chances of your deal collapsing are a lot lower. 
  • Quicker speed: Selling your house in the open market typically takes an average duration of 68 days. However, this duration is a lot shorter when dealing with “we buy houses “companies as it averages 7 to 14 days. 
  • No need for repairs: You don’t need to do the time-consuming and expensive repairs when selling your house to a “we buy houses” company.  
  • Lower fees: For many of the ‘we buy houses” companies, you won’t be required to pay the closing or real estate commissions. 


  • Some of these companies take advantage of people going through a hard time, for instance, the death of a loved one, bankruptcy, or divorce.
  • You get paid a lower value than what your house is worth.


“We buy houses” companies have become very common. Therefore, you rightly should suspect them before entering into a deal with such companies to avoid getting scammed. If you had your reservation on if these companies are even legit, this in-depth guide has enlightened you on why they are. But before choosing one, always make sure to do your research to avoid losing your hard-earned money.

We Buy Houses Companies: Are They Legit Or A Scam? was last modified: by