Red flag 1: They will not let you use your own title company
A legitimate cash buyer is happy to close at any reputable title company in your state. The title company is who actually transfers ownership and handles the money. Insisting on their title company is sometimes about coordination convenience, but sometimes it is about controlling the process in ways that benefit them and hurt you.
If a buyer pushes hard back on your title company choice, ask why. A good answer is something like 'We have a relationship with them and it is faster, but yours works too.' A bad answer is anything that sounds like 'It has to be ours.' That is a signal to walk.
Red flag 2: They want you to sign before you have read the contract
Pressure to sign quickly is the single most consistent scam signal across every industry, and real estate is no exception. A legitimate cash buyer expects you to take 24 to 48 hours to read the purchase agreement, ask questions, and have it reviewed by an attorney if you want.
The scam version sounds like 'I can lock in this offer today, but if you wait until tomorrow our pricing model recalculates and the offer might drop $10,000.' Real cash buyers do not have a magical pricing model that changes overnight. They have a deal that makes sense at the number they offered, and that does not change in 24 hours.
Red flag 3: The earnest money deposit is laughably small
Legitimate cash buyers put real earnest money down. The standard in most markets is 1 percent of purchase price, often $1,000 to $5,000. The earnest money goes into escrow at the title company and gets credited to you at closing or forfeited if the buyer backs out without cause.
Scammy buyers offer $100 or $500 in earnest money. The signal is that they have no real skin in the game. If they decide to back out a week before close because they could not assign the contract or could not raise the funding, you have lost three weeks of selling time and you have $500 to show for it. That is not enough to cover your carrying costs for that month.
Red flag 4: They are unwilling to verify their identity or track record
Ask for the buyer's name, company name, and an LLC or EIN. Look them up on your state's secretary of state site to confirm the business actually exists. Look them up on BBB. Search their company name plus the word 'review' on Google. A buyer with even modest operating history will have a footprint.
If the person sitting across from you cannot or will not give you the legal entity name, or the entity name does not match any public record, walk. Anyone doing legitimate volume has a paper trail.
Red flag 5: The offer comes from a wholesaler who never plans to close
Wholesalers put homes under contract intending to assign that contract to another investor before closing. This is legal and common, but only some wholesalers are honest about it. The dishonest version is when they sign your contract, then go shop it around for a higher number than they paid you, then either pocket the spread or walk away if they cannot find a buyer.
The protection is a clean assignment clause in the contract. Either no assignment is allowed without your written consent, or the original buyer's earnest money stays at risk if they assign. Most cash buyer contracts have neither protection by default, which is why you read the contract before signing.
What a legitimate buyer actually looks like
Picks up the phone and answers questions. Operates from a real business address you can drive to. Has a website older than six months. Has multiple Google reviews from people you can verify are real (not all five-star, not all one-star). Will close at any title company in your state. Puts real earnest money down. Sends you a contract you can take to an attorney without pressure. Will give you references from past sellers if you ask.
None of that is hard to verify in 30 minutes. Doing the 30 minutes is the difference between a clean transaction and one of the bad stories that show up on local news.