If you've ever gotten a postcard or a text offering cash for your house, you've probably wondered who is really on the other end. Some of those companies buy houses themselves. Others are middlemen, usually called wholesalers: they get your house under contract, then sell that contract to another buyer for a fee.
That's not always a bad thing, and some wholesalers are upfront about how they work. But you deserve to know which kind of company you're dealing with before you sign anything. Here's how we'd explain it to a neighbor.
Start with one question
Ask every cash buyer: "Are YOU buying my house?" Then follow up with "Whose name will be on the deed after closing?" A real buyer can answer both right away. A middleman may get vague, talk about "partners" or "our investor group," or say it depends.
Look for "and/or assigns" in your contract
Find the buyer's name on the purchase contract. If it says something like "[Company name] and/or assigns," the company can hand your contract to someone else. That doesn't prove they will, but it's the clearest sign that the company signing may not be the company buying.
You can ask them to remove it. A buyer who plans to close shouldn't mind.
Two ways middlemen work
Assignment
The wholesaler signs a contract with you, then markets it to other buyers. When they find one, they assign the contract for a fee and that new buyer closes. If they can't find a buyer, the deal may stall, the price may drop, or they may back out during their inspection period.
Double close
Two sales happen back to back, often on the same day. The middleman buys from you and immediately sells to their end buyer, often using that buyer's money. It looks like a normal sale to you, but the company you signed with never planned to own the house.
We go deeper on both in No Middlemen: What Wholesalers Don't Tell You.
Signs you may be dealing with a middleman
- A long inspection period with an easy way to cancel. That time can be used to shop your house around.
- A small deposit, or one that doesn't reach escrow right away.
- Lots of "partners" or "contractors" asking to walk through the house.
- Your house in ads you never approved, or photos of it sent to buyer lists.
- A lower price right before closing with no new information to explain it.
- Pressure to sign today, before you've had time to read the contract.
Questions to ask any cash buyer, including us
- Are you the one buying my house, with your own money?
- Whose name will be on the deed after closing?
- Will you take "and/or assigns" out of the contract?
- Are you planning a double close?
- How much is the deposit, and when does it go into escrow?
- When could the price change, and what would you show me if it did?
- Which escrow and title company will we use?
- Can I talk to a few sellers you've bought from?
Get the answers in writing. If anything in the contract is unclear, have a real estate attorney look at it before you sign.
How we do it at Trident
We're the buyer, not the middleman. When we put your house under contract, we buy it with our own cash and close in our own name. No assignments and no double closes. Our family has bought and sold houses in Southern California since 2011, and we do the repairs ourselves after closing.
Our offer doesn't change at closing, unless the inspection finds something we didn’t know about, and we’ll show you why. We'll put the offer in writing, explain how we got to the number, and close in about 7 days or on your timeline through a licensed, neutral escrow and title company. See our full process.
And if your house isn't the right fit for us, we'll tell you up front and still help you sell. We can list it, refer you to a local agent, or connect you with another local buyer, and we'll tell you plainly who would be buying before you sign anything. Call us at (909) 833-4848 or start with your address.
This article is general information, not legal, tax or financial advice. Every situation is different, so talk to a real estate attorney, CPA or other qualified professional about yours.