Wholesaling and cash home buying have a reputation problem because a real minority of operators use high-pressure tactics — lowball first offers designed to be negotiated up, confusing cancellation terms, or pressure to sign before you've had time to think it over. None of that is necessary to run a legitimate cash buying business. Here are seven questions that will tell you, fairly quickly, which kind of buyer you're dealing with.
A legitimate buyer should be able to walk you through their math — the comparable sales they used, the repairs they're accounting for, and their margin — in plain language. If the answer is vague or they get defensive, that's worth noting.
One of the appeals of a cash sale is typically no agent commissions and no closing cost surprises. Ask directly what, if anything, comes out of the number they've quoted you, and get it in writing.
Some wholesalers assign the contract to another investor rather than closing themselves. That's a normal part of the business, but you should understand what happens to your timeline and your contract if that assignment falls through.
A serious buyer shouldn't be offended by this question. Proof of funds or references from past sellers are reasonable things to ask for before you take a property off the market for someone.
Read the contract for what happens if you want out before closing. Confusing or one-sided cancellation terms are one of the more common complaints about bad-faith buyers.
You should never feel like you have to sign on the first call. A legitimate offer will still be a legitimate offer tomorrow, or with a few days to think it over and, if you want, run it by someone else.
This is one of the clearest signals of all. A buyer confident in their offer shouldn't be threatened by you also finding out what the home might fetch on the open market. If they discourage you from checking, ask yourself why.
We'd rather answer all seven of these questions clearly than have you sign something you're unsure about. If you want a second opinion on any offer you've received — from us or anyone else — we're also happy to point you toward our licensed real estate agent partner for an honest read on what listing traditionally might bring.
We'll walk you through the number, the contract, and your options — no pressure to sign anything.