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Why do you need a test for cash buyers?
If you own a house in the Twin Cities, you’ve probably gotten the postcards. We’re three brothers who buy houses in the Twin Cities, and we think you should check us as hard as anyone. “We buy houses, any condition, cash in 7 days.” Some of those letters come from real buyers who close with their own money. Many come from wholesalers, and a few come from people running outright scams. From the outside, they look the same. This test shows the difference, and it’s the same test we’d want you to run on our cash home buying offer.
There are five checks. They take about 20 minutes. Don’t sign a purchase agreement with anyone who won’t pass them.
Check 1: Proof of funds
Ask: “Can you show proof of funds in your company’s name before I sign?”
A real buyer can show a recent bank statement or a letter from their bank showing enough money to close. A wholesaler usually can’t, because they don’t plan to buy the house. They plan to sell your contract. Watch for proof of funds in a different company’s name, or a letter from a “transactional lender” that funds wholesale deals for a day.
Our answer: yes. We buy with our own funds and show proof before you sign.
Check 2: A written promise not to assign
Ask: “Will you promise in writing not to assign or sell my contract?”
This is the core of wholesaling. The buyer on your contract is listed as “ABC Homes LLC and/or assigns.” That little phrase lets them sell your contract to anyone. The end buyer may be someone you’ve never met, paying a price you never agreed to see, and the wholesaler pockets the difference.
Our answer: yes. We never assign contracts. We are the buyer who closes. See the other clauses a bad buyer hides.
Check 3: A license you can look up
Ask: “Are you licensed, and will you disclose it in writing?”
In Minnesota, a licensed real estate agent who buys a property directly has to disclose that status to the seller in writing. A license means someone answers to the Minnesota Department of Commerce and to a brokerage. Look up the person’s name in the Department of Commerce license search.
Our answer: Ryan Quade is a Minnesota Resident Real Estate Salesperson, license #40924708, with Coldwell Banker Realty. When we buy directly, he discloses that in writing.
Check 4: A registered Minnesota business
Ask: “Is your business registered with the Minnesota Secretary of State?”
Search the company name on the Secretary of State business filings site. You’ll see when it was formed, whether it’s active, and who the registered agent is. A company formed two weeks ago, based in another state, with no local address, is a warning sign.
Our answer: search our business name the same way. We’d expect you to.
Check 5: A physical address you can visit
Ask: “Where is your office, and can I come see you?”
A lot of “local” cash buyers are call centers in other states that forward leads to whoever pays the most. Ask for a street address, not a P.O. box or a virtual office. Look it up on a map.
Our answer: 6354 Oxbow Bend, Chanhassen, MN 55317. You’re welcome to drive over.
Wholesaler vs. direct buyer: how the money works
| Direct cash buyer | Wholesaler | |
|---|---|---|
| Who pays you at closing | The buyer on your contract | Someone else, after the contract is assigned |
| Proof of funds | Their own account | Often none, or a one-day lender |
| Contract language | Buyer’s name only | “and/or assigns” |
| Earnest money | Real amount, held by title company | Often $10 to $500 |
| What happens if they can’t sell the contract | They still close | They cancel or ask you for a lower price |
| Can they show you the offer math | Yes | Not without revealing their fee |
Red flags in the contract
- “And/or assigns” after the buyer’s name.
- Tiny earnest money. A token deposit means they can walk at no cost.
- Open-ended closing date like “on or before 60 days, at buyer’s option.”
- A long inspection period that lets them back out for any reason.
- Pressure to sign today. A real offer is still good tomorrow.
Ten questions to ask any cash buyer
- Can you show proof of funds in your name? Ours: yes.
- Will you assign my contract? Ours: never.
- Are you licensed, and will you disclose it in writing? Ours: yes, MN #40924708.
- What’s your registered business name? Ours: look us up.
- Where’s your office? Ours: Chanhassen.
- How did you calculate the offer? Ours: we show every line.
- Will you lower the price after the inspection? Ours: no, repairs are priced first.
- Who holds the earnest money? Ours: the title company.
- Which title company closes? Ours: a Minnesota title company, named in the contract.
- Would I net more by listing? Ours: we’ll tell you, in writing.
If you’re facing foreclosure, be extra careful
Owners in foreclosure get the most aggressive offers, including people who want an upfront fee or want you to sign your deed over with a promise to rent it back. Minnesota’s Minn. Stat. ch. 325N regulates these deals. Read foreclosure rescue scams in Minnesota before you sign anything.
Run the test on us. Then decide.