Are "We Buy Houses" Companies Legit? An Honest Answer From an Ohio Home Buyer

You've seen the signs on telephone poles. You've gotten the postcards in the mail. Maybe you've gotten texts from random numbers offering to buy your house for cash. "We Buy Houses!" "Cash for Your Home!" "Close in 7 Days!"

And you're wondering: Is this legit, or is it a scam?

The honest answer is: it depends. Some "we buy houses" companies are completely legitimate businesses run by honest people. Others are predatory operations designed to take advantage of homeowners in tough situations. And a surprisingly large number are somewhere in the middle -- they're not scammers, but they're not being fully transparent about how the process works either.

I'm Preston Hillard. I'm one of these people -- I buy houses for cash across Southwest Ohio. I'm also a licensed real estate agent with eXp Realty. So I'm going to give you a straight answer about how this industry works, what to watch out for, and how to tell a good cash buyer from a bad one.

How the "We Buy Houses" Industry Actually Works

The basic business model is simple: a company (or individual investor) buys houses below market value, usually in as-is condition, and then either renovates and resells them, rents them out, or sells the contract to another investor.

The reason they can offer a fast close with no repairs is because they're taking on the risk and the work that you don't want to deal with. They're paying less than retail because they're going to spend money on renovations, carrying costs, and selling costs. The difference between what they pay you and what they eventually sell it for is their profit.

That's a legitimate business model. It's been around for decades. And for homeowners in the right situations -- facing foreclosure, dealing with an inherited property, or stuck with a house that has title issues -- it can be a genuine lifeline.

The problem is that the barrier to entry is extremely low. Anyone can put up a "We Buy Houses" sign. Anyone can send postcards. There's no license required to buy a house (though there should be, in my opinion). So the industry attracts both professionals and amateurs -- and occasionally, outright bad actors.

The Three Types of "We Buy Houses" Companies

Type 1: Actual Cash Buyers (Investors)

These are people like me who actually purchase the property with their own money (or private financing). We close on the house, do the renovations, and either sell it or rent it out. We're the end buyer.

How to identify:

• They can provide proof of funds (bank statement or financing letter)
• They buy the property in their own name or their company's name
• They have a track record of buying and renovating properties in your area
• They can show you comparable sales and explain how they arrived at their offer
• They don't disappear between contract signing and closing

Type 2: Wholesalers

Wholesalers don't actually buy your house. They sign a purchase agreement with you at a low price, then sell (or "assign") that contract to an actual buyer at a higher price. Their profit is the difference between what they contracted with you and what the end buyer pays.

Wholesaling is legal in Ohio. It's not inherently a scam. But here's what you should know:

• The wholesaler's offer will be lower than an actual buyer's offer, because they need room for their markup AND the buyer's profit
• Deals can fall through if the wholesaler can't find a buyer willing to pay their asking price
• You're essentially paying a middleman fee without knowing it
• Many wholesalers have little to no real estate experience -- they learned the process from a weekend seminar or YouTube video

The biggest red flag with wholesalers is that they often won't tell you they're wholesaling. They'll act like they're the buyer. They'll say "we" a lot. They'll avoid direct questions about whether they're actually purchasing the property.

Type 3: Lead Generation Companies

These are the big national brands -- the ones with TV commercials and flashy websites. Many of them don't buy houses at all. Instead, they collect your information and sell it to local investors or agents. You submit your address online, and suddenly you're getting calls from five different people.

There's nothing illegal about this, but it means:

• The company you contacted isn't the one buying your house
• Your personal information is being shared with multiple parties
• The experience feels impersonal -- you're talking to someone who's never seen your neighborhood
• The "offer" you get online is usually a bait number that gets lowered once a local buyer actually evaluates the property

Red Flags to Watch For

Not every "we buy houses" company is a scam, but some are. Here are the warning signs:

They Won't Show Proof of Funds

Any legitimate cash buyer can show you proof that they have the money to close. If someone says they're paying cash but can't (or won't) produce a bank statement, a line of credit, or a lender letter, walk away. They're probably a wholesaler hoping to find a buyer after they lock up your contract.

They Pressure You to Sign Immediately

"This offer is only good today." "If you don't sign now, I'll move on to the next house." "I have three other sellers I'm talking to." These are high-pressure tactics designed to prevent you from shopping around or thinking clearly. A legitimate buyer will give you time to consider the offer, talk to your family, and consult with an attorney.

They Won't Explain How They Calculated the Offer

If you ask "How did you get to this number?" and the answer is vague or dismissive, that's a problem. A good buyer will walk you through the comparable sales, the estimated repair costs, and the math behind the offer. Transparency is everything.

They Ask You to Pay Fees Upfront

This is a major red flag. In a legitimate cash sale, the buyer pays all closing costs. You should never be asked to pay for an appraisal, an inspection, a "processing fee," or any other charge before or during the transaction. If someone asks you for money to buy your house, it's a scam.

They Renegotiate After the Inspection

This is the most common complaint in the industry. You agree on a price, the buyer "inspects" the property, and then comes back with a lower number. "We found some issues we didn't expect." "The repairs are going to cost more than we thought." "We can only do $X now."

Sometimes this is legitimate -- they genuinely found something unexpected. But more often, the original offer was intentionally inflated to get you to sign, with the plan to negotiate down later when you've already mentally committed to selling.

The Contract Has an Extended Inspection Period

A 30, 60, or 90-day inspection period in a "cash" deal is a dead giveaway that you're dealing with a wholesaler. They need that time to find an actual buyer. A legitimate cash buyer who's seen the property doesn't need more than a few days for due diligence.

They Won't Close at a Title Company

Every legitimate real estate transaction should close through a title company or attorney. The title company ensures the deed transfers properly, the mortgage gets paid off, liens are cleared, and funds are disbursed correctly. If someone wants to do a "kitchen table" closing without a title company, run.

How to Vet a Cash Home Buyer -- A Checklist

Before you sign anything, do your homework. Here's what to check:

1. Are they the actual buyer? Ask directly: "Are you purchasing this property, or are you assigning this contract to someone else?" Get a straight answer.
2. Are they licensed? Check the Ohio eLicense portal. A licensed real estate agent has ethical obligations enforced by the state. An unlicensed investor has no such accountability.
3. Can they show proof of funds? Ask for a bank statement or lender pre-approval letter. A real buyer will have this ready.
4. Do they have a track record? Google their name and company. Look for reviews, closed transactions, and a physical presence in your area. Check the Better Business Bureau.
5. Will they explain their offer? Ask them to show you the comparable sales and repair estimates that justify their number. If they can't, the number is probably arbitrary.
6. Is the contract clean? Have an attorney review it. Look for assignment clauses, extended inspection periods, and any language that lets the buyer back out easily.
7. Are they closing through a title company? Ask which title company they use. Call the title company and confirm they've worked together before.

What Makes a Good Cash Buyer

Since I'm asking you to trust me enough to call, let me be transparent about what I think separates a good cash buyer from the rest:

Licensed Agent

I'm a licensed Ohio real estate agent with eXp Realty. That means I'm held to a code of ethics, I have continuing education requirements, and I can lose my license for deceptive practices. Most "we buy houses" operators don't have a license. I do, because I want my sellers to have that layer of protection and accountability.

Transparent Offer

When I make an offer, I show you the math. I'll walk you through the comparable sales I used to determine the after-repair value (ARV), the repair estimates, and how I calculated my number. If you disagree with any of my assumptions, we talk about it. I'd rather lose a deal over a disagreement about numbers than close one where the seller feels they were misled.

No Renegotiation

The offer I make is the offer I close on. I don't give you a high number to get you to sign and then "find issues" during inspection. I've already factored in the condition of the property when I made my offer. What I tell you is what you get.

All Your Options

Because I'm both a buyer and a licensed agent, I can give you something most cash buyers can't: a full picture of your options. If listing your house on the MLS would get you significantly more money, I'll tell you that -- even though it means I don't get to buy it. My reputation matters more than any single deal.

I Handle the Hard Stuff

Title issues, liens, probate complications, tax delinquency -- these are the situations where most buyers walk away. I don't. Solving complicated title and ownership problems is actually what I'm best at. If someone else told you your house "can't be sold," give me a call.

The Truth About Cash Offer Pricing

Let's address the elephant in the room: yes, a cash offer will be less than full retail market value. That's the tradeoff. Here's why:

• Repairs: The buyer is taking the property as-is and paying for all renovations
• Carrying costs: While renovating, the buyer pays mortgage/financing, insurance, taxes, and utilities -- this can run $2,000-5,000 per month
• Selling costs: When the buyer eventually resells, they pay agent commissions and closing costs (typically 8-10% of the resale price)
• Risk: The buyer takes on the risk that the rehab goes over budget, the market shifts, or the house sits unsold for months
• Profit: The buyer needs to make a profit for the business to be sustainable

The standard formula most investors use is: ARV x 70% - Repair Costs = Maximum Offer. So on a house worth $200,000 after repairs that needs $40,000 in work, the maximum offer would be around $100,000.

That sounds low. But compare it to listing:

• If you spend $40,000 on repairs yourself and list at $200,000
• Minus $12,000 in agent commissions (6%)
• Minus $4,000 in seller closing costs
• Minus $8,000 in carrying costs over 3-4 months (mortgage, insurance, taxes)
• Net: about $136,000 -- IF the sale goes smoothly and you don't have to negotiate down

A $100,000 cash offer with no repairs, no carrying costs, and no risk of the deal falling through starts looking more reasonable in context. It's still less money, but the gap is smaller than most people think -- and the certainty and speed have real value.

When a Cash Sale Makes Sense (and When It Doesn't)

A Cash Sale Usually Makes Sense When:

• The house needs major repairs you can't afford or don't want to manage
• You're facing foreclosure and need to sell before the sheriff sale
• You inherited a property and want to liquidate it quickly
• There are title issues, liens, or legal complications
• You're going through a divorce and need a clean, fast sale
• You're a tired landlord who wants out
• You're relocating and can't manage a 3-month listing from another state
• Speed and certainty matter more than squeezing out every last dollar

A Cash Sale Usually Doesn't Make Sense When:

• The house is in good condition and move-in ready
• You're not in a hurry
• You can handle showings, negotiations, and the listing process
• Maximizing price is your only priority

If your house is in good shape and you have time, list it with a good agent. You'll get more money. I'll be the first person to tell you that.

Frequently Asked Questions

How do I know if a cash offer is fair?

Ask the buyer to show you the comparable sales and repair estimates they used. Get a second opinion from another cash buyer or a real estate agent. If the offer is within 65-80% of the property's as-repaired value (minus estimated repairs), it's probably in the fair range. If it's significantly lower, ask why -- or walk away.

Should I get multiple offers?

Absolutely. Talk to at least 2-3 buyers. Compare not just the price, but also the terms: closing timeline, inspection contingencies, who pays closing costs, and whether the buyer is the actual purchaser or a wholesaler. If you're in the Dayton area or Cincinnati area, I'm happy to be one of those offers.

Can I negotiate a cash offer?

Yes. Everything is negotiable. If you think an offer is too low, say so and explain why. A good buyer will either justify their number or adjust it. A bad buyer will pressure you to accept as-is. That tells you everything you need to know.

Do I need a lawyer?

Ohio doesn't require an attorney for real estate transactions, but I always recommend having one review the purchase agreement before you sign. It's a few hundred dollars for peace of mind, and a good attorney will catch anything that doesn't look right.

What's the difference between "we buy houses" and iBuyers like Opendoor?

iBuyers are technology companies that use algorithms to make instant offers on houses in good condition. They charge service fees (usually 5-8%) and their offers are closer to market value. But they're very selective -- they won't buy houses that need significant work, have title issues, or are in less desirable neighborhoods. For houses with problems, a local cash buyer is usually your only option.

Bottom line: "we buy houses" companies are a legitimate part of the real estate market. But like any industry, there are good operators and bad ones. Do your homework, ask the right questions, and don't let anyone pressure you into signing something you're not comfortable with.

If you have a property in Southwest Ohio and you want to talk to a cash buyer who will give you a straight answer, call me at (937) 907-1743. I'll tell you what your house is worth, what I can pay, and what all your options are. No pressure, no games.