Typically these are real estate investors who have enough cash on hand to give the seller a way to escape foreclosure or tax leins. A seller might be 4 to 6 months behind on his mortgage so the investor will make all of the back payments to get the house out of foreclosure and give the seller a lump sum of cash to walk away from the property. The investor then continues to make payments on behalf of the seller until he is able to refinance the house or assume the mortgage in his name. Its a win-win deal because the seller who was originally going to suffer the legal implications of foreclosure now gets out of the deal unscathed (which will permit him to get another mortgage) and gets $5000 to $10,000 cash out of the deal. Even though the investor gets the house and all of the equity for less than 2% of the total value of the house the seller gets cash and a fresh start.

The previous answer was half correct...Not wrong, just not entirely right. I own a company which buys and sells houses, and have been doing so for some time now. Companies use a lot of different methods to help people out of their houses when the seller is to the point they just need help. While it's true that sometimes the investor pays cash for the house, or gets a loan, this is not always the case. Sometimes, the investor takes over the payments on the existing loan. Sometimes, the investor will lease/option the house from the seller. It's not always a cash deal. And it's also not always true that the seller will receive cash from the deal. Sometimes, the only benefit a seller gets is the ability to walk away and get rid of the problem (which is the house). The last 2 houses I've bought, we purchased where the seller received no money from the deal. They had no equity in the house, so there was no money to pay. The point is: Investors know of a ton of different ways to help people out of their real estate problems. It's what we do. The seller of the house usually knows two ways to get out of a house: Sell it "by owner" or list it with an agent. When that doesn't work, an investor can sometimes help with different strategies. To answer the last question, "Is it a good deal for the seller?" It's a good deal if they're out of options and don't want to deal with the problem anymore. Might not be a good deal for you. It all depends on state of mind. Hope that helps.