Skip to Content

We Buy Houses Companies: Scam Or Not?

We Buy Houses Companies: Scam Or Not?

You don’t have to drive around for long to see a “We Buy Houses” sign plastered on street signs or telephone poles.

Have you ever wondered if those signs were legit? Read on to find out.

What Is We Buy Houses?

We Buy Houses is a slogan used by a company that offers people cash for their homes. But it can also refer to a direct homebuyer branch. Knowing the difference between the two is key.

With a branch, a real estate investor applies for a license with We Buy Houses in their local market. The investors are exclusive to the area; you won’t find more than one in each market.

When you submit your contact information to, they put you in touch with the investor in your market.

It’s not a franchise; it’s simply a license through the company to buy homes under their banner.

What is we buy houses graphic featuring a screenshot of the process on a home page

While this is just one example, there are thousands of homebuyers who will present you with a cash offer for your home. And they’re all using the “We Buy Houses” signs to attract attention from sellers.

But is this business model right for you? After all, instant cash for your home has to come with a catch, right? Read on to learn how they work so you can decide if they’re a viable option for you.

How It Works

Go to the website of the person using the We Buy Houses sign (this is often a local investor who specializes in buying homes). From there, simply fill out a form with your property details.

Provide your personal data and property details. These include the number of bedrooms and bathrooms, location, the approximate asking price, and the reason you’re selling.

Within a few hours, the investor will contact you to introduce themselves and set up a time to see the home. During that visit, they’ll make an offer for your home or present you with other options that may be available.

Upside of “We Buy Houses” Companies

Real Estate: Congratulations and Here's Your Home Keys

Sean Locke Photography/Shutterstock

There are many reasons someone may choose to sell their home through direct home buyer advertising from We Buy Houses. Perhaps you inherited a house you need to sell fast, or your home needs repairs you can’t afford.

Or maybe you’re just in a pinch and need to quickly tap your home’s equity. Whatever the reason, there are some pros and cons to be aware of when looking to use this process to sell your home. These include:

No Questions Asked

If your property has deferred maintenance, it’s likely to be in disrepair. Even if you’ve found yourself with a home that needs a ton of repairs, someone is interested.

There is probably an investor out there who’s interested in flipping it or buying the land it sits on. They’ll usually pay cash for your property no matter what.

Rental Properties Are Considered

If you own a rental property and have a bad tenant living in it, you may still be able to sell it to an investor.

In fact, the We Buy Houses investors have more than a little experience with problem tenants, so it’s not a problem for most buyers.


If you fall into the category of someone who needs expensive repairs done before you can sell your home, you know that going through the process of selling the traditional way is cumbersome. Using a real estate agent to sell on the market can also take a long time.

With We Buy Houses companies, you can easily sell your home, even if it’s in disrepair. The investor will try to purchase your home for a low price. But in exchange for that low price, you free yourself of the burden of your home.

No Wasted Time

If you try to sell your home on your own, it’s considered “For Sale By Owner.” This can be a very challenging process for you to navigate. Most people who go down this road do so to avoid paying real estate commissions or other fees.

But selling your home yourself can be a ton of work since you have to market the home yourself. You’ll take professional-quality pictures of your home and be available for showings to ensure the buyer is qualified for the mortgage.

You’ll then represent yourself during critical stages, such as the home inspection. When you use a We Buy Houses buyer, these headaches aren’t even on your radar.

It’s One Decision

When you sell your home the traditional way, you have to make a million tiny decisions along the way.

If you simply don’t want that headache, then We Buy Houses is a great option for you. You get an offer and decide if you want to take it or not. Easy peasy.

You Don’t Need an Agent

Happy property owners shaking hands with real estate broker after a deal. Young couple handshaking real estate agent after signing contract.

Jacob Lund/Shutterstock

It can take time and effort to find a good real estate agent to work with. In fact, you can spend a lot of time and energy interviewing to find the right one.

With We Buy Houses companies, you don’t have to worry about any of that. You’re flying solo.

Foreclosure is OK

If your home is in foreclosure or you’re behind on your payments, a We Buy Houses investor may still want to buy it.

In fact, as long as the bank doesn’t own your property and the foreclosure hasn’t been finalized, they can still make you an offer on your home.

Underwater Home Saviors

It’s not uncommon for home sellers to owe more money than their home is worth. We Buy Houses investors can work with your bank to buy your home through a process called a short sale.

During this process, the investor works out a price for your home with the bank that is often less than what is owed. While this seldom actually happens, it’s worth knowing about.

Downside of We Buy Houses Buyers

buying or moving house concept, miniature cardboard house with magnifying glass analyzing it as an image for a piece on we buy houses


Of course, there are cons to working with We Buy Houses companies. The cons include:

Lower Sale Prices

In most retail sales, even if you’re working with a real estate agent, your goal is to sell the property for as much money as possible. Sure, the agent takes their slice of the real estate pie.

But that only motivates them to get the best price possible for you. Selling to an investor simply doesn’t net you the profits you may see with an agent.

No Improvement Opportunities

Even homes that need work can often have small, value-added changes made that will attract buyers willing to pay more money. That option simply isn’t on the table with a We Buy Houses investor.

Remember, the investor most likely wants to make changes to make the house more attractive to buyers; they’re the ones looking to make a profit in this situation.

Investors Understand Stress

As a featured image for a piece on We Buy Houses, Tired exhausted businessman massaging nose bridge, taking off glasses, feeling eyestrain, sitting at work desk, young man suffering from dry eye syndrome, fatigue after long laptop use


Unfortunately, the downside to selling off-market is that a home buyer understands how stress works.

In fact, they call sellers in extreme circumstances “motivated sellers.” This means that they know why you’re selling.

While ethical sellers exist, others are more scrupulous. There is value in selling a property in any condition, as the buyer is assuming the risk if they’ve overlooked a code violation or structural issue.

However, you need to understand that the buyer will likely see your situation and pick up on phrases like “how soon can we close” or “I couldn’t pay my mortgage.”

Other Considerations

Whether or not you’re dealing with a We Buy Houses investor, you need to know how you can potentially lose your shirt on the deal.

Ronnie with Rose Props does a great job breaking down some things to be wary of when dealing with direct homebuyers. Nice job, Ronnie!

A Word of Caution

There are many companies using bandit signs that declare, “We Buy Houses!” Make sure to always research the investor you decide to work with. After all, signs are cheap to print, so you’re sure to encounter some less-than-ethical buyers.

It never hurts to get a second opinion. After all, you could be leaving tens of thousands of dollars on the table.

Remember that traditional motivated sellers are just that—motivated. While ethical direct homebuyers will do what’s right, the real estate industry is packed with slimeballs out to make a buck at someone else’s expense.

As a final note, you can always ask for reviews of past customers. My flipper friends (who I find to be very ethical) always have a list of real-life, happy homeowners to use as referrals.

Should You Sell to We Buy Houses?

Home buying is all We Buy Houses investors do, so the process is fast. And let’s face it, direct homebuyers exist for that reason: to help you sell your house fast.

As long as you understand you’re not going to be getting the market price for your home and you’ve weighed all your options, then a We Buy Houses company is a legit option for you.