Opportunity page · Vetting guide · Updated April 2026

How to vet a cash home buyer — the 5-question script and red-flag checklist

A cash offer on your OC house is not automatically a good cash offer. There's enormous variation in the quality of "we buy houses" buyers — some are legitimate local investors with decades of closed deals, some are wholesalers who've never closed a house in their lives and are planning to assign your contract to an actual buyer at a markup, and some are outright scammers operating in exactly the spaces where sellers are most vulnerable (pre-foreclosure, estate, grief, divorce). This guide is the vetting layer. It should take you about 20 minutes to run on any buyer, and doing it could easily save you tens of thousands of dollars or prevent the deal from falling apart two weeks before close.

I'm a cash buyer in OC. If you run this vetting on me, I'll give you the same answers I'm about to tell you to ask. That's the point — the script works because the real buyers pass it easily and the unreal ones stumble. Don't feel bad about making someone prove they're real. The good buyers expect to be asked.

§ 1 · The five questions to ask any cash buyer

These are the five questions. Ask all of them. A qualified buyer answers all five quickly and without defensiveness. Hesitation on any one is a signal to slow down and dig.

Question 1: "Will I be selling to you, or will you assign this contract to someone else?"

This is the biggest filter. Two very different business models hide under "we buy houses" signage. A direct buyer (sometimes called a "flipper" or "true investor") signs a contract, closes with their own funds, takes title, and either renovates or rents the property. A wholesaler signs a contract at price X, then tries to sell the contract to another investor at price Y before close, pocketing Y−X as their fee. They never intend to close themselves.

Wholesaling is legal in California. It's not inherently a scam. But:

• Your deal closes only if the wholesaler finds an end-buyer willing to pay their markup within the inspection/contingency window. A meaningful percentage don't.
• The end-buyer, once found, may want to renegotiate. You then have a choice: accept the reduced price or let the deal fall through.
• You are trusting the wholesaler's judgment and skill, not a balance sheet. With a direct buyer, the money is the money.

If a buyer says "I might assign" or "I work with a network of investors," they are a wholesaler. Price in the risk of fall-through. If a buyer says "I close with my own funds, title goes to my LLC, here's my EIN" — that's a direct buyer. They're not always the right choice, but they're a different quality of counterparty.

Question 2: "Can you show me a proof of funds letter dated in the last 30 days?"

A legitimate cash buyer can produce one of three documents:

• Recent bank statement or screenshot showing liquid funds ≥ offer price
• Letter from their bank or private lender confirming funds available for the purchase, dated within 30 days
• If funds are coming from multiple sources (private investor, HELOC, etc.), a letter explaining the structure and a statement for each source

Account numbers can be redacted. Balance must be visible. If the proof of funds is from a "hard money lender" — that's a lender, not cash, and the deal is effectively a financed purchase disguised as a cash offer. Hard money deals can close, but they have inspection contingencies, appraisal thresholds, and fall-through rates similar to conventional loans. Ask if that's what you're dealing with.

Question 3: "How many Orange County houses have you closed in the last 24 months, and can you send me addresses?"

Real buyers have closed deals. Their names appear in public records on deed transfers. Ask for three specific addresses of houses they've purchased in OC in the past two years. Then verify:

• Search the OC Assessor's parcel search for each address — confirm the buyer's LLC or personal name is on title at the reported purchase date.
• Search the OC Recorder's office for the recorded deed — it's public record, free to search online.
• If the addresses don't come back — or if they can't give you addresses at all — that's a serious red flag. A real buyer has a portfolio. Zero portfolio, zero deals, zero signal.

Question 4: "What title and escrow company do you use, and can I call them?"

Any serious OC cash buyer has an established relationship with one or two title and escrow companies. They'll give you the company name and an officer's direct phone without hesitation. Call that officer. Ask how many deals they've closed with the buyer in the past year. A legitimate buyer will have several closed deals; the officer will speak naturally about them. A new or fake buyer won't be in the officer's files.

Don't let the buyer insist you use their specific company. In California the seller gets to pick title insurance (custom practice varies but the right is yours). If a buyer pushes back hard on your choice of escrow, that's another signal.

Question 5: "Can I see a sample purchase agreement you've used before?"

Every experienced cash buyer has a standard contract — either CAR (California Association of Realtors) forms modified for cash, or their own attorney-drafted template. Ask to see a blank version or a redacted previous deal. Read it. Red flags:

• No inspection period at all, or an excessively long one (30+ days) — long inspection periods tie up your property while they shop it to other investors.
• Excessive seller-cost allocations — buyer pays all closing costs is standard for cash; seller paying closing costs out of the ordinary.
• "Subject to" clauses that make close conditional on the buyer reselling the contract.
• No specific earnest money amount, or an unusually low one (under $1,000 on a six-figure transaction).
• Liquidated damages clauses capping your recovery to the earnest money deposit alone.

§ 2 · Red-flag checklistThings that should slow you down

• Pressure to sign today, this moment, before speaking to anyone else. The hallmark of scam operators. Legitimate deals don't evaporate if you take 24 hours.
• Offer given before they've seen the house, either physically or via photos. Sight-unseen offers are meaningless placeholders that get renegotiated dramatically once they walk the property.
• Refusal to provide proof of funds, or stalling on it. "I'll send it later" that becomes days. A real buyer can send PoF within an hour.
• No local address or OC track record. National brands can be fine, but out-of-state "buyers" with no local portfolio often don't close.
• Inspection period longer than 14 days on a standard house. Red-flag for assignment/wholesale — they need time to find an end-buyer.
• Purchase agreement requires you to vacate before close. Never. Close first, then vacate per the post-close possession terms.
• Asking for any upfront money from you. Never give a buyer money for any reason. "Administrative fees," "processing fees," "earnest money holding fees" — all variations of scam setups.
• Promising to "take over your payments" instead of paying you cash. This is a "subject-to" transaction. Legal, but legally complex; your mortgage remains in your name while someone else lives in the house. Entirely different risk profile than a cash sale. If that's what they're actually offering, it should be clearly labeled as such, not sold as "cash."
• Refusal to use independent escrow. In California, using a third-party licensed escrow is essentially non-negotiable for a safe cash transaction.
• Unsolicited offers with your name and exact equity amount. Common in pre-foreclosure scams. They pull the NOD filing and pitch you a lowball offer with urgency framing. See foreclosure help for the legal framework around pre-foreclosure rescue fees.

§ 3 · Sample proof-of-funds letterWhat a good one actually looks like

Here is what a legitimate proof-of-funds letter contains. If what you receive doesn't look roughly like this, ask why.

§ 4 · The wholesaler question — nuanced answer

I said earlier that wholesaling is not inherently a scam. Here's the longer version of that thought, because wholesalers get painted with one brush and that's lazy.

Wholesalers play a real role in the market. They source deals from sellers who don't have a direct relationship with the investor community, they match those deals with end-buyers, and they take a fee for the match. In an economic sense, they're brokers without a license, which is why the California DRE has been clear that wholesalers who "double close" or who market property they don't yet own may be operating as unlicensed real estate brokers — with attendant legal risk.

From a seller's perspective, the risk with a wholesaler isn't that they're dishonest; it's that their business model has a built-in risk of fall-through. They can't close without finding an end-buyer at a markup. If they don't find one (or don't find one at their needed price), your deal dies. That's a risk you should price into the offer they're making. If a wholesaler offers you $650K and a direct buyer would offer $625K, the $25K is paying for the risk of fall-through. Sometimes that trade makes sense. Usually it doesn't.

A reasonable question to ask a buyer who says they might assign: "What's your track record of successfully closing once you go under contract?" Real wholesalers track this. The good ones close 70%+ of contracts they sign. The bad ones close 30-40%.

§ 5 · The specific California consumer protectionsRules designed for your safety

California has enacted a cluster of consumer-protection statutes specifically around residential real-estate purchases from distressed sellers. Know them.

• Civil Code § 1695 — the Home Equity Sales Contract Act. Governs sales to investors where the seller is in foreclosure. Five-day right of rescission. Specific contract disclosure requirements. Purchase contracts with investors covering NOD-filed properties must comply. Violations are void contracts.
• Civil Code § 2945 — Foreclosure Consultant Act. Anyone who charges or receives a fee for services to help you avoid foreclosure is regulated; they cannot take upfront fees; contracts are rescindable.
• Civil Code § 2944.7 — specifically prohibits collection of upfront compensation by foreclosure rescue providers before all contracted services are performed.
• Business & Professions Code § 10131.4 — restrictions on unlicensed real estate brokerage, which may include certain wholesaling activities.
• Civil Code § 1102 et seq. — seller disclosures. These apply regardless of buyer type; don't let a cash buyer skip them for you.

§ 6 · The "too good to be true" asymmetry

If a cash offer is substantially above every other cash offer you've received — especially if the buyer hasn't seen the property, is from out of state, and is pushing fast timelines — it's almost certainly a tactic to tie up your property under contract while they shop it. Real cash buyers operating at market price cluster in a tight range (maybe 5-8% spread on a given house). A $750K offer on a house where other cash buyers are at $640K is a sign of bait, not a sign of your luck.

Watch for the reveal: after you sign, in day 5 or 10 of inspection, they "discover" something that "requires" a $100K price reduction. The reduction is usually engineered to bring the net price back to (or below) what other cash buyers were honestly offering at the start. Meanwhile, your house has been under contract for a week — and if you now walk, you've lost time.

Ask yourself when offered an outlier: does this offer make sense relative to what else I'm hearing? If the answer is no, the offer is usually either a mistake you should capitalize on quickly, or a bait-and-switch you should refuse. The way to tell the difference is the vetting above.

§ 7 · Bypass the vetting: work with someone already vetted

There is a faster path that skips most of the vetting work: referral. If you know someone (friend, family, agent, attorney) who has sold to a specific cash buyer recently and speaks well of the experience, that's already half the vetting done. Ask the referring party:

• Did the buyer close on the original offer, or did they re-trade during the inspection?
• Did the close happen on the original timeline?
• Were there any surprises at the closing table?
• Would they sell to this buyer again?

Four yes answers, and you can move to a signed offer with a lot less scrutiny. OC's legitimate cash-buyer community is small — a few dozen active operators, most of whom show up repeatedly in family-law and probate circles. Most divorce attorneys, probate attorneys, and foreclosure-specialist agents in the county have their short list. Ask.

§ 8 · The 10-minute vetting checklist

Summary — if you remember nothing else:

• Confirm: direct buyer, wholesaler, or hard-money financed. Price the risk accordingly.
• Request: proof of funds dated within 30 days. Verify against the offer amount.
• Request: three OC addresses they've closed in the past 24 months. Verify two of them in public records.
• Request: title/escrow company name and officer contact. Call the officer.
• Request: sample purchase agreement. Read the inspection period, earnest money, and liquidated-damages clauses.
• Google: their name + "complaint" or + "lawsuit" or + "DRE action." Don't overweight one unhappy Google review, but patterns matter.
• Check: BBB rating (secondary signal), Google Business reviews (secondary signal), California Secretary of State business entity filings (confirming the LLC exists and is in good standing).
• Call at least one past seller on their reference list and ask about the close.

If a buyer passes every step of this, you have a real cash buyer. If they fail two or more steps, you have a reason to pause regardless of how attractive the number looks.