Are “we buy houses” cash offers a ripoff?
“We buy houses” companies are legal, legitimate businesses — not scams. But their offers are often well below market value, frequently 50% to 70%, and some so-called cash buyers don’t actually have the money. They put your home under contract at a low price, then sell that contract to a real investor for a fee that averages around $22,000 in Georgia. The offer itself isn’t fraud. The real risk is accepting far less than your home is worth without ever realizing it.
By Tim Maitski | June 24, 2026
It’s the question I hear most often once a seller gets one of those postcards or yard signs: is this a scam? The honest answer is no — most “we buy houses” companies are running a legal, legitimate business. But “not a scam” and “a good deal for you” are two very different things, and the gap between them is where Atlanta homeowners lose real money.
Let me show you how these deals actually work, the part most sellers never see, and how to tell a fair cash buyer from a predatory one.
The part most sellers don’t see: many “cash buyers” don’t have the cash
Here’s the mechanic almost nobody explains. A large share of the people texting and mailing you about a cash offer aren’t investors at all — they’re wholesalers. They don’t intend to buy your home. Their business is to get you to sign a purchase contract at a low price, then turn around and sell that contract to a real investor who actually has the money.
The difference between what they talked you into and what the real investor will pay is their profit. It’s called an assignment fee, and in Georgia it’s not small — wholesaler assignment fees here average around $22,000 per deal, well above the national average. That’s money that could have stayed in your pocket.
And here’s the uncomfortable logic that follows: the lower the price they can talk you into, the bigger their payday. Your loss is, quite literally, their profit margin. Some operators go a step further and use a “double closing” specifically so neither you nor the end investor ever sees how much they made in the middle.
None of this is illegal when it’s done with the right disclosures. But if you didn’t know the person making the offer wasn’t the actual buyer — and that they were marking up your home to someone else the same week — you’d be right to feel like something was off.
Why Georgia passed new laws to protect home sellers
You don’t have to take my word that these tactics were a problem. The Georgia legislature, pushed by the Georgia Association of Realtors, passed a series of consumer-protection laws aimed squarely at predatory solicitation:
- SB 90 (effective January 2024) requires that any unsolicited written offer to buy your property carry a clear disclosure at the top of the page stating it’s a solicitation and you’re under no obligation to respond.
- HB 240 (effective May 2024) goes further: if that solicitation names a price, it must also state, in plain language, that the offer may or may not reflect the fair market value of the property. The penalty for violations was raised to $600 per piece.
- Georgia also has an elder financial fraud statute that treats targeting older homeowners as a serious felony — a direct response to operators who sought out vulnerable sellers.
Laws like these don’t get written about practices that aren’t happening. They exist because enough sellers were getting hurt that the state stepped in. A legitimate buyer who includes the required disclosures has nothing to hide. The ones who skip them are telling you something.
One more thing worth knowing as a Georgia seller: this is a caveat emptor, or “buyer beware,” state, and closings are handled by an attorney. That framework protects buyers more than sellers, which is all the more reason to have someone in your corner reading the contract before you sign.
Red flags that separate a fair cash buyer from a predatory one
Not every cash buyer is a problem. Plenty are honest, and a clean cash sale can be exactly right in the right situation. The trouble comes from a specific set of behaviors. Watch for these:
- No proof of funds. A real buyer can show a recent bank statement or a letter from their bank. If they dodge this, they probably don’t have the money — they’re planning to assign your contract.
- An assignment clause with no explanation. Check whether the contract lets them transfer it to “and/or assigns.” That’s the wholesale tell. Ask directly: are you the actual buyer, or are you assigning this to someone else?
- A lowball anchored to your stress. If the number is closer to 50–60% of value and they’re leaning on how fast and easy it’ll be, they’re pricing your urgency, not your home. (For a full breakdown of what each buyer type really pays, see my post on how much cash home buyers actually pay.)
- Pressure and artificial deadlines. “This offer expires tonight” is a sales tactic, not a market reality.
- A re-trade after inspection. A strong opening offer that quietly drops by thousands once their inspector visits — often right before closing — is a classic move.
- A one-sided contract. Easy exit clauses for them, tight deadlines and big penalties for you, and a small or vague earnest money deposit. The paperwork tells you who the contract is built to protect.
If you see two or three of these together, slow down. There’s no real-world deadline that’s worth tens of thousands of dollars.
So is it ever a good deal?
Yes — for the right seller. If you need to close in days, can’t carry two mortgages, are selling an inherited home that needs major work, or simply want to skip showings entirely, a legitimate cash sale can be worth the discount. The trade is real money for real speed and certainty, and sometimes that trade makes sense.
The key is to make it a choice rather than something that happens to you. Before you sign anything:
- Ask for proof of funds and confirm you’re dealing with the actual buyer.
- Get a second opinion on what your home would bring on the open market, so you know the size of the discount you’d be accepting.
- Have the contract read by someone who works for you, not for the buyer.
This is exactly the kind of thing I walk sellers through — for free, with no pressure. A cash buyer treats your home as a commodity to be discounted by a formula. A marketed listing sells the story of your home to the buyer who falls in love with it, and that’s what produces offers a wholesaler could never match. Most of the time, once a seller sees both numbers side by side, the math makes the decision for them.
If you’ve gotten a cash offer and want to know whether it’s fair, grab my free guide, The Five Mistakes Sellers Make That Cost Them Thousands, at truthrealestategroup.com. And if you want the full system for getting the most out of your sale, my book Home Story Branding lays it out step by step on Amazon.
Frequently Asked Questions
Are “we buy houses” companies legit or a scam?
Most are legitimate, legal businesses, not scams. The risk isn’t fraud — it’s that their offers are often 50–70% of market value, and some buyers are wholesalers who assign your contract to a real investor for a fee rather than buying it themselves. The danger is accepting far less than your home is worth without knowing it.
Is wholesaling real estate legal in Georgia?
Yes. Wholesaling is legal in Georgia when the person assigns their contractual rights rather than marketing a property they don’t own. But Georgia now requires specific solicitation disclosures under SB 90 and HB 240, and targeting elderly homeowners can trigger felony elder-fraud penalties.
How do I know if a cash buyer actually has the money?
Ask for proof of funds — a recent bank statement or a letter from their financial institution verifying available cash. A legitimate buyer will provide it without hesitation. If they avoid the question or rely on an “and/or assigns” clause, they likely intend to sell your contract to someone else.
What is an assignment fee, and who pays it?
An assignment fee is what a wholesaler earns for transferring your purchase contract to the real buyer. In Georgia it averages around $22,000. While the end investor technically pays it, that money comes out of the spread created by talking you down — so in practice, it comes out of your potential proceeds.
Can a cash buyer back out of the contract?
Often, yes. Many investor contracts include contingencies and easy exit clauses that let the buyer walk while holding you to tighter terms. This is why reviewing the earnest money amount and the contingency language before signing matters so much.
About Tim Maitski
Tim Maitski is the founder of Truth Real Estate Group, brokered by Atlanta Communities Real Estate Brokerage, and has been a Realtor since 1999. He created the Home Story Branding system, which helps sellers earn more by transforming a home from a commodity into a property with a story that connects emotionally with buyers, who then perceive it as more valuable. Tim is the author of two books, Home Story Branding and Don’t Buy These Homes, and serves homeowners and buyers across Sandy Springs, Dunwoody, East Cobb, and the greater Atlanta metro.