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Are House Buying Companies Legitimate?

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This is a question that often comes to mind when homeowners are considering a fast sale.

Selling traditionally involves listing a house on the market, waiting for potential buyers, and going through a lengthy closing process. But what if there was another way?

House buying companies claim they can expedite this process by purchasing properties directly from sellers quickly and efficiently. But are they legitimate?

Table Of Contents:

Exploring the Concept of House Buying Companies

The real estate market is a complex ecosystem with diverse players, some of which are house buying companies. These entities serve as cash buyers and provide an expedited solution for homeowners looking to sell their houses quickly.

Types of House Buying Companies

To better comprehend these businesses, it’s crucial to understand that there are different types. iBuyers constitute one such category – they’re online-based operations utilizing algorithmic pricing models to make quick offers on houses.

Another type are investors who acquire properties intending to hold them for long-term rental income and future value appreciation. Their strategy contrasts with investors who are house flippers, specializing in purchasing homes to fix them up and then resell them for a profit. Real estate wholesalers may be considered a third type of investor. They specialize in finding properties for others to buy. Of course, there are investors who engage in ALL of these activities.

Trade-in companies are also a player, offering homeowners the opportunity to “trade-in” their current property for cash to be used on another house, after which the trade-in house is sold.

Are House Buying Companies Legitimate?

The legitimacy of house buying companies is a common concern for homeowners contemplating selling their house quickly. While house buying companies offer a unique proposition in a fast and convenient sale, it’s important to note that among the credible operators, there less reputable ones who engage in predatory practices.

Decoding Fast Sales

A fast sale can be an extremely important benefit provided by these companies. Some sellers need to avoid foreclosure. Others need to relocate quickly. Still others don’t want to spend the time to make repairs. 

In this environment, predatory practices can manifest. Some disreputable entities might inflate repair costs or provide unjustifiably low cash offers, exploiting sellers who need to sell quickly and may not be informed enough to negotiate.

If you are concerned about a particular company, trust your instincts. Pause whatever is going on and be sure to shop around. Ask for a proof of funds. Know that you are free to negotiate. Do thorough research before accepting any offer. Know how much your house is worth and how much repairs would cost. Consider obtaining a professional inspection and appraisal.

No-Obligation Cash Offers

One way to test legitimacy of a buyer is simply to request a no-obligation cash offer. This will allow you to compare offers from different companies without any pressure or commitment. Reach out to companies that are transparent and willing to educate you and answer all your questions. Be wary of sales tactics like time pressure. 

Getting a cash offer will involve describing the current condition of your house. This allows the company to make a reasonable estimate of repairs and arrive at an informed number.

Negotiation is Essential

If you are interested in proceeding with a house buying company, remember that negotiation is crucial. Initial offers may not be set in stone, and further information and communication can lead to better offers. 

Exploring Alternatives to Cash Sales

Selling your house for cash may not always be the best fit. You might find more value in other avenues, such as listing on the open market with a real estate agent

For homeowners looking to sell their house quickly but not wanting to compromise on price, other alternatives include seller financing and “subject to” arrangements.

Seller Financing

Seller financing is an option that allows sellers to act like a bank. The buyer will pay you monthly instead of a traditional lender. This can be appealing for sellers who want to minimize taxes, invest easily, and still get the convenience of a fast sale.

“Subject To”

“Subject to” refers to buying a house subject to the existing mortgage being left in place. In this scenario, rather than taking out another loan, an investor buys the house by agreeing to make payments on the existing mortgage. This can be appealing to a seller whose house is worth less than their outstanding mortgage, because they don’t have to sell at a loss.


This is the traditional, agent-based sales process. A good real estate agent will guide you through the whole process, arrange showings, negotiate on your behalf, and handle paperwork. Their expertise, combined with selling on-market, can result in the best sales price, especially for a home in great shape.

Main Idea: 


House buying companies offer speed and convenience, but prices are lower because of the need for repairs to make a home market-ready. Test the legitimacy of a potential buyer. To ensure a fair deal, conduct thorough research and don’t be scared to negotiate.

Traditional on-market methods may yield higher profits but are less convenient.

Creative methods such as seller financing, which some house buying companies provide, can give the best of both worlds!


How do I know if my cash buyer is legitimate?

A legitimate cash buyer will provide proof of funds, offer a fair price, and won’t pressure you into signing contracts hastily. Cash buyers can be legitimate, but it’s crucial to research the company making the offer. Look for transparency in their process and verify their reputation.

What are the types of house buying companies?

The different types include iBuyers, investors, and trade-in companies.


We are also a house buying company. If you are interested in exploring selling to a house buying company, contact us to see what we can do for you! We would be happy to provide education, answer all your questions, and present you with different options at no obligation.

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