To gain real insight into how these companies operate and the steps you should take for due diligence, we reached out to property expert and commentator Kelvin Elliott, founder of myhomebuyers.co.uk a highly reputable cash buying company with extensive experience in property purchases. Here’s what he had to say:

1. What are the biggest red flags homeowners should watch out for when dealing with cash house buyers?

The biggest red flag when dealing with a cash house buying company is if they make you an offer and then ask you to sign a contract. A genuine company should never require you to sign a contract before the sale is completed.

To put this into perspective, if a buyer made an offer through an estate agent, you wouldn’t sign a contract directly with them. The only contract you should be signing is the one your solicitor provides just before completion.

When selling to a company at a discount, you are paying a significant premium for their service, and it’s their responsibility to deliver on that service. If, at any point, you become dissatisfied, you should be free to walk away.

Many companies claim that if they change their offer, you can cancel without cost. However, they fail to mention that if they delay the process, you might still be bound by their contract and could face penalties for withdrawing. Some companies inflate their initial offer to win your business, only to drag out the sale and later reduce their offer when you’re already committed.

Bottom line: Never sign a contract with a cash house buying company. If you avoid this, you’re already 90% of the way to dealing with a legitimate company.

2. How can sellers verify that a cash house buying company truly has the funds to complete a purchase?

The first step is to check Companies House to review their balance sheet for assets and equity. A reputable company should have a strong financial position.

Secondly, if you find their formal offer acceptable, always request proof of funds before proceeding. A genuine company will have no issues providing this. If they hesitate, make excuses, or refuse to show proof, this is a major red flag, and you should walk away.

For context, when an estate agent receives an offer on a property, they always confirm proof of deposit/cash in the bank and, if needed, an up-to-date mortgage agreement. The same standard should apply to cash house buying companies—always verify their funds.

3. What common tactics do scam cash buyers use to manipulate sellers, and how can people avoid falling victim?

The two most common tactics used by unscrupulous companies are:

1. Overinflating the initial offer – They make an offer much higher than they intend to pay, just to win your business. They then ask you to sign a one-sided contract. Later, at the last moment, they find an excuse to significantly reduce the offer, hoping that by this time, you are packed up and committed to moving, so you reluctantly accept the lower amount. Unfortunately, they never intended to pay the original offer from the start.
2. Not actually buying the property themselves – Some companies don’t buy your property at all. Instead, they secure your property under contract and then try to sell it to a third party for a profit. If they fail to find a buyer, they lower their offer to you. Even if they do find a buyer, they essentially act as an estate agent, and the sale could still fall through. In many cases, they will simply list your property on Rightmove—something you could do yourself.

The good news: These companies will always ask you to sign a contract, so by refusing to sign one, you’re already protecting yourself from these scams.

4. How reliable are online reviews for assessing cash house buying companies, and what should sellers look for when reviewing them?

Online reviews can be an extremely useful tool when assessing a cash house buying company, but you need to know what to look for:

• Start by reading the 1-star reviews first. These will give you an honest picture of how the company treats its customers.
• Look for reviews from sellers who have actually completed a sale. Some companies push for positive reviews after just the initial phone call, which doesn’t reflect the full experience.
• Be cautious of manipulated reviews. Some companies remove bad reviews or artificially inflate their ratings.
• Check multiple platforms. Compare reviews on Google, Trustpilot, and independent forums to get a more accurate picture.

By focusing on verified customer experiences and completion reviews, you’ll get a much clearer idea of how the company actually operates.

5. What legal protections exist in the UK to safeguard homeowners from fraudulent or unethical cash house buyers?

Unfortunately, there is very little regulation in the cash house buying sector, and more protections are desperately needed.

The Property Ombudsman provides a redress scheme, but its powers are limited. While it can assist with complaints, it does not have the authority or power to prevent bad practices.

Since there are no strong legal protections in place, homeowners must take extra precautions themselves when dealing with cash house buyers.

6. What practical steps can homeowners take to protect themselves from being scammed by a cash house buyer?

To avoid being scammed, homeowners should follow these three key steps:

1. Never sign a contract with a company. A legitimate cash house buyer has no reason to tie you into an agreement before the sale.
2. Request proof of funds. If the company is genuine, they will provide this without hesitation.
3. Ask the company to exchange contracts first and set a completion date that suits you. For example, if you need two months before moving, you can agree to exchange contracts within 2–3 weeks. Once exchanged, the sale becomes legally binding, and the company cannot change their offer. If they delay or make excuses before this stage, you are free to walk away since you never signed a contract.

By following these steps, you stay in control of the process, ensuring you only deal with reputable buyers.

Final Summary

To protect yourself from cash house buying scams:

✔ Never sign a contract with a company upfront.
✔ Always ask for proof of funds.
✔ Insist on an exchange of contracts within 2 – 3 weeks, with completion at a time that suits you.

If you follow these guidelines, your chances of being scammed are extremely low. To see what a genuine cash house-buying company might offer, click the Cash Offer Calculator tab below.