We-Buy-Houses Scams in Florida: How to Vet a Cash Home Buyer

Most "we buy houses" companies are real businesses that pay cash and close. A scam shows itself in what the buyer asks you to do before closing: pay a fee, sign over the deed first, or skip the title company. Check those three things and you will catch most of the bad ones. This page gives you the checklist, and it applies to us as well.

The signs that come up again and again: pressure to sign the same day, a refusal to show proof of funds, a request for upfront fees, a vague contract, and a company with almost no online footprint. HomeLight lists the same cluster in its guide to "we buy houses" signs. Any one of them is a reason to stop and ask questions. Two together is a reason to walk away.

A real cash buyer is comfortable with slow questions. A fee request is the clearest flag. A buyer pays you at closing; you do not pay a buyer to buy your house.

Homeowners behind on the mortgage are the main target, and Florida has a specific law for it. Section 501.1377 of the Florida Statutes says homeowners who are in default or in foreclosure "may be vulnerable to fraud, deception, and unfair dealings" and regulates two kinds of players: foreclosure-rescue consultants, who offer to stop the foreclosure for money, and equity purchasers, who take title to a house in foreclosure.

The classic foreclosure-rescue scam works like this. Someone offers to save your house, has you deed it to them or a land trust "temporarily", promises you can rent it and buy it back, then keeps the equity or sells the house out from under you. This is called equity skimming. The statute treats a lease-option or buy-back deal on a house in foreclosure as presumptively a loan with the deed acting as a mortgage, and it requires the buyer to assume or pay off the lien in foreclosure at or before the transfer.

If you are in this position, read our guide on how to stop a foreclosure in Florida first. The legitimate options are on that list, and none of them starts with signing over your deed.

No. Under section 501.1377 a foreclosure-rescue consultant may not ask for or take payment before every service in the agreement is done. The agreement has to be in writing, in at least 12-point uppercase type, and signed by both sides. You have 3 business days to cancel without penalty, and any money you paid must come back within 10 business days.

A violation is an unfair and deceptive trade practice, with a penalty of up to $15,000 per violation under the same statute. If someone asks for an "advance fee" to stop your foreclosure, you have your answer.

A sale to an equity purchaser needs its own written agreement, with the full legal description of the property, the total price, any debts the buyer takes on, and the date possession transfers. It must carry this line above the signature, in uppercase: "I understand that under this agreement I am selling my home to the other undersigned party." The buyer must hand you a copy within 3 hours of signing, and you can cancel until 5 p.m. on the third business day.

If the paperwork you are handed has none of this, or the buyer says you do not need to read it, stop. A deal that is honest about being a sale does not mind saying so in writing.

Ask for a recent bank or brokerage statement, or a letter from the lender, showing the money for your price. Ask for it before you sign, not at the closing table. Match the name on the statement to the name on the contract. If the buyer says the money is "tied up" or sends a letter from an unnamed source, treat it as no proof.

Some buyers are wholesalers: they sign a contract with you, then look for the actual buyer. This is common, and it means the person on your contract may not be the one with the cash. Ask directly: "Will you close on this house yourself, or do you plan to assign the contract?" A straight answer is a good sign.

A licensed title agent or real estate attorney holds the money and the deed, checks the title, pays off your mortgage and any liens, and hands you the balance in one transaction. You never hand over a deed to the buyer on a promise. Choose the title company yourself if you can, and look up its name before you agree to anything.

Read the settlement statement before closing. Your mortgage payoff, any liens and the buyer's costs should all be listed, and the figure you receive should match the contract. Our guide on Florida seller closing costs shows what a normal statement looks like.

Look at five things: the price and who pays closing costs; the deposit and whether it is refundable; the closing date; any clause that lets the buyer assign the contract or cancel for any reason; and any clause about a lease-back, a buy-back or a "memorandum" recorded against your property. A recorded memorandum can cloud your title if the deal falls through, which can stop a later sale.

If the contract is unclear, have a Florida real estate attorney read it before you sign. A one-time review costs far less than a deal that goes wrong.

Deeds are public record. Search the county property appraiser or clerk of court for the buyer's name and see whether it has closed purchases in your county. Look for the company in the Florida Division of Corporations business search to confirm it exists and who runs it. Ask for two or three recent sellers you can call. Read reviews, but weigh the ones you can verify more than the ones you cannot.

A cash offer is also lower than a retail sale, by design. A low offer is not a scam on its own. The question is whether the buyer explains the number, and whether you can compare it with an agent's estimate. We explain how that gap works in our guide on selling without a realtor.

We do not charge sellers fees or commissions: you pay nothing to get an offer and nothing to us at closing. Hold us to the rest of the list too: ask for proof of funds, ask whether we will close ourselves, and read the contract with an attorney if you want to. If an answer is not clear, do not sign.

Florida homeowners can file a complaint with the Florida Attorney General's Office through myfloridalegal.com, and report fraud to the Federal Trade Commission at reportfraud.ftc.gov. If you already signed a foreclosure-rescue agreement, send your written cancellation inside the 3 business days and keep proof of mailing. Then speak to a Florida attorney or a HUD-approved housing counselor about the deed.