You need to sell your Florence house fast. You see those “We Buy Houses for Cash” signs everywhere. You get postcards in the mail. You see online ads promising quick cash for your home.
Some sound legitimate. Some sound too good to be true. You’ve heard horror stories about cash buyer scams – people who take your money, steal your property, or disappear after you sign contracts.
How do you tell the difference between a legitimate cash buyer and a scam? What are the red flags? What should you ask? How do you protect yourself?
I’m Brandon, and my partner David and I run Yellowhammer Home Buyers. We’re a legitimate cash buyer in Florence, and we want you to know how to protect yourself – even if you don’t sell to us. Let me show you the red flags of scams and what legitimate cash buyers actually do.
Common Cash Buyer Scams
Let’s talk about actual scams we’ve seen or heard about:
The “Assignment Fee” Scam
How it works:
- Scammer makes you sign contract
- Contract says they can “assign” it to another buyer
- They never intended to buy your house
- They try to sell your contract to real investor
- Charge you “assignment fee” of $5,000-$15,000
- Or deal falls through and you wasted weeks
Red flag: Contract allows assignment to third parties without your consent
Legitimate practice: Some wholesalers do this legally, BUT they should disclose upfront they’re wholesalers, not end buyers.
The Equity Stripping Scam
How it works:
- Scammer offers to “save you from foreclosure”
- Has you deed property to them
- Promises to pay you later
- Takes out new mortgage on your property
- Disappears with loan money
- You lose house and get nothing
Red flag: Asks you to transfer deed before you get paid
This is theft.
The Fake Proof of Funds Scam
How it works:
- Shows you fake bank statement
- Claims they have cash to buy
- Ties up your house for 30-60 days
- At closing, “financing fell through”
- You wasted critical time
- House still not sold
Red flag: Won’t provide verifiable proof of funds from actual bank
The Lowball and Switch
How it works:
- Makes verbal offer of $150,000
- You stop marketing house
- At closing, “discovered issues”
- Actual contract is for $120,000
- Pressure you to close anyway
- “You already stopped other buyers”
Red flag: Verbal offers that change dramatically in writing
The Upfront Fee Scam
How it works:
- Asks for upfront payment for “inspection”
- Or “title search fee”
- Or “processing fee”
- Takes your $500-$2,000
- Disappears
Red flag: Legitimate buyers NEVER ask sellers for upfront money
Real buyers pay their own costs.
The Deed Theft Scam
How it works:
- Forges your signature on deed
- Records fraudulent deed transfer
- Takes out mortgage on “their” property
- You discover when foreclosure notice arrives
Red flag: You receive mortgage statements you didn’t apply for
This is fraud and identity theft.
Red Flags to Watch For
Here are warning signs someone isn’t legitimate:
High-Pressure Tactics
Scammers say:
- “You must sign TODAY”
- “This offer expires in 2 hours”
- “Other buyers are interested, decide now”
- “Don’t talk to anyone else about this”
Legitimate buyers:
- Give you time to think
- Encourage you to consult attorney
- Put offer in writing
- Don’t pressure instant decisions
Won’t Provide Company Information
Scammers:
- Use only cell phone number
- No business address
- No website
- Can’t verify LLC/company registration
- Use P.O. Box
Legitimate buyers:
- Have business address
- Website with company info
- Registered LLC (verify with Alabama Secretary of State)
- Licensed agents (if applicable)
- Professional online presence
Asks for Money or Fees
Scammers ask for:
- Inspection fee
- Processing fee
- Title search fee
- Earnest money paid to them (not escrow)
Legitimate buyers:
- Never ask sellers for fees
- Pay their own inspection costs
- Deposit earnest money with title company (not directly to seller)
Won’t Use Title Company
Scammers:
- Want to “save money by not using title company”
- Want to handle closing privately
- Pressure direct deed transfer
Legitimate buyers:
- Always use title company
- Title company ensures clean transfer
- Title insurance protects both parties
Vague or Confusing Contracts
Scammers:
- Contract is one page and vague
- Doesn’t specify exact purchase price
- Full of “subject to” clauses
- Allows them to back out anytime
- Doesn’t protect you
Legitimate buyers:
- Clear written contract
- Specific purchase price stated
- Standard real estate contract
- Clear terms and timeline
- Your interests protected
Can’t Prove Funds
Scammers:
- Show printed bank statement (easily faked)
- Say “trust me, I have the cash”
- Vague about funding source
Legitimate buyers:
- Provide bank letter on bank letterhead
- From actual bank officer
- Or proof of funds from attorney/title company
- Verifiable
What Legitimate Cash Buyers Actually Do
Now let me show you how real, honest cash buyers operate:
We Inspect Property First
Our process:
- Visit your Florence house
- Inspect condition thoroughly
- Note needed repairs
- Assess market value
We can’t make accurate offer without seeing property.
We Provide Written Offer
Clear written offer includes:
- Exact purchase price
- What’s included/excluded
- Closing timeline
- Contingencies (if any)
- Clear terms
No verbal promises – everything in writing.
We Explain Our Numbers
We show you:
- Current market value (if repaired)
- Repair costs we estimate
- Our costs and profit margin
- How we calculated offer
Transparency builds trust.
We Use Licensed Title Company
Every transaction:
- Title company conducts title search
- Title company handles closing
- Title insurance issued
- Proper legal transfer
- Funds held in escrow until closing
Protection for everyone.
We Give You Time to Decide
We don’t pressure:
- Take days or weeks to decide
- Consult attorney
- Get other offers
- Talk to family
Good offer doesn’t expire in hours.
We Provide Verifiable Proof of Funds
We can show:
- Bank letter confirming funds
- Previous closings we completed
- References from title companies
- Track record
We prove we’re legitimate.
We’re Licensed (If Applicable)
In Alabama:
- Real estate license #000170383-1 (Brandon)
- Registered LLC
- Verifiable company information
- Professional reputation
You can verify everything.
Questions to Ask Any Cash Buyer
Here’s what you should ask before accepting any offer:
About Their Company
Ask:
- What’s your company’s legal name?
- How long have you been in business?
- Can I see your LLC registration?
- Do you have a physical office address?
- Can you provide references?
Legitimate buyers answer all of these easily.
About the Offer
Ask:
- What exactly are you offering?
- How did you calculate this price?
- What repairs are you accounting for?
- Is this your final offer or will it change?
- Can I get this in writing?
Watch for vague answers or refusal to explain.
About the Process
Ask:
- What title company will we use?
- Can I choose the title company?
- What’s the timeline from offer to closing?
- What do I need to provide?
- Are there any fees I pay?
Red flag: Won’t use title company or wants you to pay fees.
About Proof of Funds
Ask:
- Can you provide proof you have funds to close?
- Can I verify this with your bank?
- Have you closed other deals recently?
- Can you provide contact for previous title company?
Legitimate buyers provide this without hesitation.
About the Contract
Ask:
- Can I have my attorney review the contract?
- What happens if I need to cancel?
- Are there any assignment clauses?
- What contingencies do you have?
Scammers discourage attorney review.
How to Verify a Cash Buyer Is Legitimate
Take these steps to protect yourself:
Search Online
Google their:
- Company name
- Owner names
- Phone number
- Address
Look for:
- Reviews (Google, Facebook, BBB)
- Professional website
- How long in business
- Any complaints or scam reports
Check Business Registration
Alabama Secretary of State:
- Verify LLC is registered
- Check business is active
- See who the registered agent is
Takes 5 minutes online.
Verify Real Estate License (If Applicable)
Alabama Real Estate Commission:
- Check if they claim to be licensed agent
- Verify license is active and valid
- Check for disciplinary actions
Call Their References
Ask for:
- Recent title companies they’ve used
- Previous sellers they’ve worked with
- Attorney references
Call and verify they actually closed deals.
Consult Your Own Attorney
Before signing anything:
- Have real estate attorney review
- Cost: $300-$500
- Worth it for protection
Any legitimate buyer encourages this.
What We Do Differently
Since we’re writing this, let us tell you how we operate:
Full Transparency
We provide:
- Our LLC registration
- Brandon’s real estate license
- Physical office information
- Track record of closings
- References from title companies
Everything is verifiable.
Fair Pricing
We explain:
- How we calculated offer
- What repairs we’re factoring
- What our costs are
- What profit margin we need
You understand the numbers.
Professional Process
Every sale:
- Written contract
- Licensed title company
- Attorney present at closing
- Title insurance
- Clean legal transfer
No shortcuts.
Your Timeline
We close:
- As fast as 7 days if you need
- Or as slow as 60+ days if you need time
- On YOUR schedule
We’re flexible.
FAQ: Cash Buyer Scams
Q: Are all cash buyers scams?
A: No. Many legitimate investors buy houses for cash. Just vet them carefully.
Q: Should I ever pay upfront fees?
A: No. Legitimate buyers pay their own costs.
Q: Is it normal to use assignment contracts?
A: Some wholesalers do this legally, BUT they should disclose upfront they’re wholesaling, not buying.
Q: How can I verify proof of funds?
A: Ask for bank letter on bank letterhead, call the bank to verify, or ask title company to verify.
Q: Should I sign deed before getting paid?
A: NEVER. Deed transfers at closing when you get paid. Both happen simultaneously at title company.
Q: What if they pressure me to decide immediately?
A: Walk away. Legitimate buyers give you time to think and consult professionals.
The Bottom Line
Cash offer scams exist, but legitimate cash buyers do too. Red flags include pressure tactics, upfront fees, won’t use title company, can’t prove funds, and vague contracts. Protect yourself by verifying company, checking reviews, consulting attorney, and taking time to decide.
Working with legitimate cash buyers who are transparent about their process protects your interests.
Questions about cash buyers in Florence? Contact us or call (256) 795-3014. We’re happy to explain our process.