If you are in foreclosure in Florida, you have probably seen the signs: "We Buy Houses — Cash — Fast Close." They are on telephone poles, in your mailbox, on social media, and sometimes at your front door. Some of these buyers are legitimate investors who can genuinely help you sell quickly. Others are scammers who will exploit your desperation to strip your equity and leave you worse off.
This guide shows you exactly how to tell the difference. You will learn the specific warning signs of a scam offer, how to verify that a cash buyer is real, and when a cash sale actually makes sense for your situation.
What Is the Difference Between a Legitimate Cash Buyer and a Scammer?
The fundamental difference is intent. A legitimate cash buyer wants to purchase your property at a fair (if discounted) price, close the transaction properly, and either renovate and resell or hold as a rental. A scammer wants to exploit your distress to acquire your property at a fraction of its value — or, in the worst cases, steal your equity without ever actually buying.
| Legitimate Cash Buyer | Scam Buyer |
|---|---|
| Offers 70-85% of market value | Offers 30-50% of market value |
| Provides bank proof of funds letter | Shows screenshots or self-made documents |
| Uses a title company for closing | Wants to close without title company |
| Encourages attorney review of contract | Pressures you to sign immediately |
| Contract has clear, straightforward terms | Contract has hidden assignment clauses |
| Registered on Sunbiz as FL business | No verifiable business registration |
| Puts everything in writing | Makes verbal promises not in contract |
| Happy to provide references | Avoids providing references |
How Do Lowball Offers Exploit Homeowners in Foreclosure?
Scam buyers target homeowners in foreclosure because they know you are under time pressure. Foreclosure filings are public record — scammers purchase these lists and contact homeowners directly. They make an offer that seems like a lifeline: "I can close in 7 days and stop your foreclosure."
The offer is typically 30-50% of market value. On a $300,000 home, they might offer $120,000 to $150,000 — stealing $150,000 or more of your equity. They know you may not have time to list the property traditionally, and they count on your fear of foreclosure to make you accept a terrible deal.
Before accepting any offer, get an independent comparative market analysis (CMA) from a licensed real estate agent, or pay for a professional appraisal. Know what your home is actually worth. Barrett Henry, a REALTOR with 23+ years of real estate experience and Broker Associate at REMAX Collective, provides free CMAs to Florida homeowners facing foreclosure — so you know exactly what your property is worth before making any decisions.
What Are Hidden Assignment Fees in a Purchase Contract?
This is one of the most common "we buy houses" scams, and most homeowners have never heard of it. Here is how it works:
- The "buyer" puts your home under contract at a low price — say $150,000 for a home worth $280,000.
- The contract includes an assignment clause buried in the fine print, allowing the buyer to assign their purchase rights to another party.
- The original buyer never had any intention of purchasing your home. They immediately market the contract to other investors at a higher price — say $200,000.
- An actual buyer pays $200,000. The original "buyer" pockets the $50,000 difference as an assignment fee. You receive $150,000 instead of the $200,000+ you could have gotten.
This practice is called wholesaling, and while it is legal in Florida, it becomes predatory when the wholesaler exploits distressed homeowners with deeply discounted offers and hides the assignment clause. Always have an attorney review the contract and look specifically for assignment language.
Why Are Verbal Promises Dangerous?
"I'll take care of your back payments." "I'll make sure you get relocation money." "I'll let you rent the house after closing." If it is not in the written contract, it does not exist.
Scam buyers make generous verbal promises to get you to sign a contract that contains none of those terms. Once the contract is signed, only the written terms are enforceable. The verbal promises evaporate.
Rule: Every promise must be in the written contract. If the buyer refuses to put a promise in writing, that promise is meaningless. Walk away.
How Do Scam Buyers Pressure You to Skip Attorney Review?
"We need to close this week or the deal is off." "My attorney already reviewed the contract — you don't need another one." "Getting an attorney involved will just slow things down and cost you money."
These are pressure tactics designed to prevent you from having an independent professional identify problems with the contract. A legitimate buyer will always give you reasonable time — typically 3-5 business days — to have an attorney review the contract. If a buyer pressures you to sign without attorney review, they know the contract contains terms that an attorney would flag.
How Do I Verify a Cash Buyer Is Legitimate?
Follow these verification steps before signing anything:
- Search Sunbiz.org:Verify the buyer's company is registered as a Florida business entity. Check the registration date, registered agent, and active status. A company registered last month that claims years of experience is suspicious.
- Request bank proof of funds:Ask for an official letter on bank letterhead, dated within 30 days, showing sufficient funds to purchase your property. Call the bank directly (using the number from the bank's website) to verify the letter is authentic.
- Require a title company: All legitimate transactions use a licensed title company for closing. The title company holds funds in escrow, performs a title search, and ensures the transaction is recorded properly. If the buyer wants to close without a title company, it is a scam.
- Check references: Ask for the names and phone numbers of at least three homeowners they have purchased from. Call those references.
- Search their name + "scam" or "complaint": A simple internet search can reveal complaints, lawsuits, and warnings from other homeowners.
- Have an attorney review the contract: A real estate attorney can identify assignment clauses, equity stripping terms, and other red flags.
When Does a Cash Offer Actually Make Sense?
Not all cash offers are scams. In some situations, selling to a legitimate cash buyer is the best option:
- You need to close very quickly to stop a foreclosure sale. Cash sales can close in 7-21 days versus 30-60 days for financed purchases.
- Your home needs significant repairs that you cannot afford and that would prevent a traditional sale. Cash buyers often purchase as-is.
- The offer is reasonably close to market value (70-85%), and the discount is offset by speed, certainty, and no repair costs.
- You have compared the cash offer to what you would net from a traditional sale (after agent commissions, repairs, carrying costs, and time) and the cash offer is competitive.
Even in these situations, always use a title company, have an attorney review the contract, and verify the buyer's identity and funds. A legitimate buyer will welcome all of these safeguards.
What Should I Do Instead of Accepting a Lowball Offer?
You may have more options than you think:
- List with a licensed real estate agent: Even in foreclosure, you may have time to list and sell at or near market value. A sale during foreclosure can stop the process and protect your equity.
- Negotiate a short sale: If you owe more than the home is worth, a short sale may be better than both foreclosure and a lowball cash offer.
- Pursue loan modification: A loan modification can restructure your payments and let you keep your home.
- Consult a HUD counselor: Free counseling to explore all your options before making any decisions.
Want a free, honest assessment of your home's value and your options? Contact us for a free consultation. We help Florida homeowners understand their real options — not just the ones scammers want you to see.