To begin with, there are a number of legitimate companies that can buy houses out of foreclosure. In general, they provide a valuable service and a very quick means of liquidating the house to pay off the mortgage and end the foreclosure process. The ones that may be seen advertising on billboards with statements such as "We Buy Ugly Homes," "Will Pay Cash For Your House Today," etc. are all legitimate companies. Granted, some of their representatives may not be the most ethical or knowledgeable, but the companies themselves are usually in good standing. They are simply bargain shoppers looking for the lowest possible price for a property that they can make an almost immediate profit on reselling.
However, few of these companies, if any, will offer foreclosure victims a fair price for their house to get them out of foreclosure. That is not their business model, and they do not act out of purely altruistic reasons to help homeowners stop foreclosure. If homeowners want a fair market price for their house, they will have to list the house on the open market and search for a buyer willing to pay the fair market value. Of course, the problem with this approach is that there is no easy way to magically come up with a buyer willing to pay full price. As many homeowners trying to sell their properties now are realizing, finding a willing buyer who qualifies for a purchase can take more than a year, if the property sells at all.
However, the companies with fast cash are offering homeowners a lower amount now -- without having to wait for open houses, Realtors to show the property, or random families to respond to a yard sign. Homeowners in foreclosure will have to decide between definitely less cash now or maybe more cash later. That is the trade-off for working with these companies. But for homeowners in foreclosure who are running out of time to come up with a solution before they lose their home, selling and making no profit may be a better option than going through with the foreclosure.
Furthermore, the quick-sale low-offer companies only offer homeowners a price that they know they will most likely be able to make a profit on in a few months to a year. So if the homeowners themselves have a few months to spare or can put together a temporary solution to stop foreclosure, then they might be able to sell for the price that the company is estimating they would be able to sell the property for. Of course, with foreclosure fees, attorney costs, and accelerated loan interest and late fees, the homeowners' profit margin on the house will shrink over time, unless they can work out a solution that puts the foreclosure on hold or stops the process altogether.
Most of these companies can offer a legitimate service to unload a house quickly. They are not designed to emulate the open market, though, so their offers will be quite low (possibly in the 60-70% range). It will be up to the individual foreclosure victims to look into their offers and determine if it is something that will help the situation or if there is a better alternative. Of course, in any foreclosure situation, homeowners should not rely on just this option to save their homes and should gain as much foreclosure advice as possible and put together numerous plans, in case this option or any other falls through. Even more important than having a solution to foreclosure is having a backup plan when the first solution fails.