Why “we buy houses” signs are everywhere, and what they actually mean

THE SIGNS ARE ADVERTISING, AND THAT IS FINE

You have seen them. We buy houses, any condition, fast close, that number on a torn-off tag by the freeway ramp. There is a whole genre of internet advice telling you they are all predatory. There is another genre telling you they are the answer to everything. Both are selling you something.

Here is what is actually happening, and how to sort the useful ones from the rest.

WHO IS ACTUALLY BEHIND THE SIGN

• A flipper. They buy it, fix it, and sell it. They need the discount to cover the repairs and still make money. Straightforward.
• A wholesaler. They do not buy anything. They get the property under contract and sell the contract to somebody else. Legal, common, and worth understanding before you sign one.
• A landlord or small investor. They want to hold it and rent it. They usually pay more than a flipper because they do not need the same margin.
• A real estate agent with an investor-style funnel. They want a listing but are fishing with cash-offer language. Sometimes that ends well for you. Sometimes it means you get pitched a listing you did not ask for.

THE THREE QUESTIONS THAT SORT THEM OUT

You can identify almost anybody in about four minutes with these.

• Are you buying this yourself, or assigning it to somebody else? A wholesaler should say so plainly. If they dodge, that tells you something.
• What happens if you cannot close? A real buyer will have a real answer about their funds. A wholesaler needs a buyer for the contract.
• Will you show me the numbers behind your offer? Not the appraisal, the arithmetic. Repairs, holding costs, and what they need to make. Anybody who will not walk you through it is hoping you will not ask.

WHAT A FAIR OFFER ACTUALLY LOOKS LIKE

A cash offer is not the value of the house. It is the value of the house minus what the buyer has to spend, minus what they need to earn, minus the risk they are carrying while they wait. That last one is real and it is usually the part sellers find hardest to accept.

If the discount looks enormous, ask which line item is eating the difference. Sometimes the answer is legitimate. Sometimes the answer is that you called the wrong number.

THE PART NOBODY TELLS YOU

You are allowed to talk to several. Nothing about a sign obliges you to a single conversation, and there is no fee for asking four people what they would pay. Compare the terms, not just the numbers, and be suspicious of anybody rushing you past the part where you read things.

Question for you: have you ever called one of those signs? I would genuinely like to know what happened, because the answers people give me are all over the place.