Short answer: some are, and some are not. A "we buy houses" company is legit when it can show proof of funds, puts its offer in writing, closes through a title company or attorney, is a real business you can trace, and never asks you for money. If a buyer fails any of those tests, treat it as a red flag. Below are seven checks to run before you sign anything with a Memphis cash buyer, including us.
Why everyone asks this question
Search "we buy houses Memphis" and the first page is mostly social profiles and directory listings, with a few actual buyers mixed in. Billboards, yard signs, and phone calls add to the noise. From the outside, a local company, a national franchise, a wholesaler, and a scammer can all look the same.
The business model itself is legal and common. Investors buy houses for cash, fix them up, and sell or rent them. The risk is in how a specific company behaves. That is why the checks below focus on behavior you can see, not on slogans.
Three kinds of buyer you might meet
A direct buyer uses its own money, or money from partners, to buy your house and own it. This is what we do.
A wholesaler puts your house under contract, then sells the contract to another investor for a fee. It is legal, but it adds risk. If the wholesaler cannot find an end buyer, your deal can fall apart after weeks of waiting.
A scammer collects fees or personal information and disappears, or tries to get you to sign a deed or wire money before the sale is real. It is rare, but it is why you should follow the checklist.
The seven checks
1. Look for a real business behind the name
Can you find a company name, an address, and a person to talk to? Look the company up in Tennessee Secretary of State business records, or the Mississippi equivalent if your house is in DeSoto County. A trace that goes nowhere is a warning sign. A local presence does not guarantee honesty, but a ghost does not earn trust either.
2. Ask for proof of funds
A direct buyer can show a recent bank statement or a letter from a lender or bank showing the money is there. If they refuse or change the subject, they may be a wholesaler or may not have the cash. It is a fair question, and a legitimate buyer will not be offended by it.
3. Get the offer in writing
A number over the phone is not an offer. A written offer shows the price, the closing date, who pays closing costs, and any conditions. Read it. If it differs from what you were told, that is a problem.
4. Never pay anything up front
A legitimate cash buyer does not charge application fees, inspection fees, or processing fees. You are the one being paid. If someone asks for money before closing, walk away.
5. Close with a title company or attorney
Your closing should run through a neutral third party. The title company searches the title, holds the money, and records the deed. Do not sign a deed before the funds are secured, do not wire money to a buyer, and do not hand over the keys until you are paid.
6. Read the contract and watch for assignment language
Many contracts let the buyer assign the contract to someone else. That is how wholesalers work. It is not automatically bad, but you should know if it is there and what it means. Also look for clauses that let the buyer cancel for any reason or give the buyer a long time to close. If you are not sure, have an attorney read it first.
7. Check reviews you can verify, and do not let anyone rush you
Look for reviews on sites where you can click through to the reviewer. Be careful with testimonials a company types for itself. And take your time. A fair offer is still a fair offer tomorrow. Pressure such as "this offer expires tonight" is designed to keep you from comparing options.
Is "We Buy Houses" a good company?
People also ask this by name. "We Buy Houses" is a phrase used by many independent buyers, and it is also the name of a national franchise with local owners. They are separate businesses, and you cannot judge one by the other. Whatever name is on the sign, run the same seven checks.
Red flags in plain language
- They will not tell you their full name or company name.
- They want a deposit, fee, or any payment from you.
- They will not give you anything in writing.
- They ask you to sign a deed or a power of attorney before closing.
- They push you to skip the title company.
- They promise a price that sounds too good, then change it after they see the house.
- They have no address, reviews, or online presence you can check.
What a legit cash offer looks like
A cash offer on an as-is house is almost always lower than a fully repaired retail sale price. That is normal, because the buyer takes on the repairs, the holding costs, and the risk. In return you get certainty, no commissions, no showings, and no repairs. If someone offers you a retail price on a house that needs a lot of work, ask why. Either they do not plan to honor it, or they plan to renegotiate later.
To see how a sale works from first form to closing, read how it works. To compare options, read our guide on cash vs listing in Memphis.
Questions to ask any buyer, including us
- Can I see proof of funds?
- Can I have the offer in writing?
- Are you buying this house yourself or assigning the contract?
- Which title company or attorney will close?
- Who pays closing costs?
- How did you arrive at the price?
- Can I have an attorney review the agreement?
We are happy to answer every one of these. If a buyer is not, that tells you something.
Frequently asked questions
Are all we buy houses companies scams?
No. Many are real businesses that buy houses with their own money. Verify proof of funds, get the offer in writing, and close through a title company or attorney.
Should I ever pay a fee to a house buyer?
No. A legitimate cash buyer does not charge you to get an offer or to close. Walk away from anyone who asks for money up front.
How do I know if a buyer is a wholesaler?
Ask whether they are buying the house themselves or assigning the contract. Look in the contract for assignment language. Wholesaling is legal, but you should know when it is happening.
Where can I check a Memphis company?
Start with Tennessee Secretary of State business records, then look for reviews you can click through to the reviewer, and ask for the closing title company by name.