Are cash home buyers legit, and how much do they pay?

Written by Michael FrankeLast reviewed: November 2, 2026

Many cash home buyers are legitimate, and you can tell the real ones because they close through an independent title company or attorney, never ask you to sign over your deed before closing, and never charge you upfront. The FTC warns about scammers who offer cash far below what similar homes sell for or ask for the deed. As for price, cash buyers generally pay less than the open market: a UC San Diego study found all-cash buyers in general paid about 10% less than buyers with mortgages.

Key facts

Red flags from the FTC: pressure to sign the deed over, being told to stop talking to your lender, or being asked to send mortgage payments to the company (FTC).
Transferring the deed does not move the mortgage off you (FTC).
All-cash buyers paid about 10% less than mortgage buyers on average, 6% to 17% by market (UC San Diego).

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Warning signs of a bad buyer

They want you to sign the deed over before closing, or to sign papers letting them act for you. HUD warns this can leave you a renter in your own home (HUD).
They tell you to stop talking to your lender or to send your payments to them (FTC).
They ask for fees before anything is done. For mortgage relief services, that is illegal.
They pressure you to sign today. For sale-leaseback offers, the FTC says to walk away from that pressure and have a lawyer or someone you trust read the contract (FTC).

How to check a cash buyer

These are practical steps, not legal requirements. The FTC's guidance on mortgage relief and sale-leaseback offers is the closest official checklist (FTC).

Ask for proof of funds, such as a bank statement or a letter from their lender of capital.
Insist on an independent title company or real estate attorney to hold the money and record the deed.
Get the offer in writing with the price, closing date and who pays closing costs.
Look them up: business registration in your state, reviews, and complaints with your state attorney general.
Never sign over the deed until you are at closing and the funds are being paid.

How much cash buyers pay

There is no reliable public figure for what share of market value cash buying companies offer; the percentages you see online come from the companies themselves or from lead sellers. The best independent evidence is a UC San Diego study of about two million sales, which found all-cash buyers in general paid about 10% less than mortgage buyers, with the gap ranging from about 6% to 17% by market (UC San Diego). For a house that needs work, the offer will also reflect repairs.

Large iBuyers publish their fees. Opendoor charges a 5% service fee plus a condition adjustment (10-K). In 2022, the FTC alleged that Opendoor's offers were often below market value and its costs higher than it said; Opendoor paid $62 million to settle (FTC).

The fair test is your net: compare a cash offer with what you would keep after commissions, repairs, months of carrying costs and the risk of a buyer's financing falling through. Our cash offer vs listing comparison shows the math.

Frequently asked questions

Are "we buy houses" companies a scam?

Not as a rule, but scams exist. A legitimate buyer closes through an independent title company or attorney, pays at closing and never asks for your deed or fees upfront.

How much less will a cash buyer pay?

Independent research found all-cash buyers paid about 10% less than mortgage buyers on average. Houses that need repairs get lower offers, because the buyer takes on that cost.

How do I know a cash buyer really has the money?

Ask for proof of funds and use your own title company or attorney. Money should move only at closing.

Sources

Checked against each source on November 2, 2026. This page is general information, not legal or tax advice.

Mortgage relief scams (Federal Trade Commission)
Risky business: offers to cash out your home equity through a 'sale-leaseback' (2024) (Federal Trade Commission)
Avoiding foreclosure (U.S. Department of Housing and Urban Development)
All-cash home buyers pay 10% less than mortgage buyers (UC San Diego Today)
Opendoor Technologies Form 10-K, fiscal year 2025 (U.S. Securities and Exchange Commission (EDGAR))
FTC takes action to stop online home buying firm Opendoor Labs Inc. from cheating potential sellers (Federal Trade Commission)