How to Avoid Cash Home Buyer Scams
Like in every industry scammers exist, and its important to know the red flags too look out for are and how to make sure youre youre dealing with a legitiamte real estate investment company.
We Buy Houses Scams
Selling your property to a cash buyer puts you at risk of "we buy home scam." It is essential to understand how cash offers on house scams and off-market buyers work to avoid these tricksters. "We buy any house scams" can cost you thousands of dollars. It is always better to work with professional real estate agents to spot red flags timely.
If you're considering selling your house, learning how to avoid cash home buyer scams can benefit you significantly. Keep on reading to learn how you can do it.
Check Their Reviews Page (not only on Google)
Doing your due diligence is what matters most and there's a few ways to verify the buyers' reliability.
Make sure to learn as much about the company as you can. Check their website, read their reviews (and just not the 5-star ones), and reach out to previous clients of the company.
A quick search on Google is not enough to get adequate and reliable information. You should check to see if they're listed in any of the 57 online directories and whether the information is consistent.
Do They Have A Nice Website?
Another way to avoid cash house scams is to check their online presence.
A professional and nice looking website with all the essential information can tell you a lot about the company.
Does The Person On The Phone Seem Trustworthy?
Gut instinct or intuition also has a role to play here.
If you find a person confidently answering all your questions without any hesitation they should be considered trustworthy. If they don't have the right answers or seem unprofessional, they're probably not trustworthy, and you should look elsewhere.
Are Cash Home Buyers Legit?
A company that purchases properties for cash are some of the most popular options to selling your property without a realtor.
However, you need to proceed with great caution. Most cash home buyers are either wholesalers or flippers interested in buying distressed properties at a lower price than market value.
This however is something that works in your favor. Many traditional home buyers don't want to risk purchasing distressed properties. The some that are will haggle on every detail of the home to lower the price.
Private cash buyers take on the risk of purchasing your property and give you cash instantly. But that's also why you have to be 100% transparent with the buyer about any details relevant to the acquisition. If issues you failed to address appear during the inspection period you're asking price will most likely be effective. So it's important that both parties be professional and respectful to one another.
So are these cash home buyers legit?
Not all of them.
For most cash buyers, the purchase is seen as an investment. Most of the companies and investors are legitimate realtors or real estate experts.
That means you shouldn't expect to obtain the full market value or price when they offer cash for your home. They look for houses that need some repair and that will allow for profit after said repairs have been completed. But this is a risky endeavour that's never guaranteed to work out.
How to Spot 'Cash Offer' We Buy Houses Scams
You must watch out for "buy your house for cash scams" by looking for potential clues.
Here are some ways to avoid them.
- Do Your Due Diligence
Going through a website or having a business card isn’t always enough to verify a company's credibility. If they're local you can go visit their storefront, if they're not then schedule a Zoom Meeting with them. Regardless you should always read their reviews to evaluate their authenticity.
If you find any misleading information or something that simply doesn't add up, move on from the interested cash buyer.
- Keep the Behavior of the Investor in Check
Hesitation and over-eagerness are the two key giveaways of cash buyer scams.
The behavior of your investor can reveal a lot about them. If they’re over eager or hesitate unnecessarily on your reasonable requests, you may be dealing with a scammer.
Wait Until Closing to Exchange Money and Sign over the Deed
Remember that any requests from an interested cash buyer to change the "dealing process" should raise a red flag.
Any strange requests, like unexpected fees and closing costs, may mean that you're better off finding a cash buyer who is legitimate.
Understanding the Real Off-Market Buying Process
If you know what to expect and what should and shouldn't happen in the buying process, you can spot the irregularities.
Legitimate buyers usually ask for your home's details or like to take a tour with you to assess the property.
They only make an offer after collecting information and finding out the condition of your home. You need to be vigilant about how the deal proceeds and the contract details to avoid a buy scam.
"Cash for Homes" Scams and "We Buy Houses" Scams
Be aware of the fake home buyers and "we buy ugly houses scams" by consulting professionals and legitimate real estate investors.
Doing your due diligence is very important, and doing so will likely lead to more cash in your pocket
Understand the Flow of Money in a Legitimate Real Estate Transaction
In a legitimate real estate transaction the money agreed upon will be transferred from the investor straight to you, the seller.
Scammers, however, may ask you to pay hefty administrative fees before you sign the deal.
Once you pay, they disappear with your money.
It's a shame that people who have legitimate and time sensitive reasons to sell their home have to deal with scammers. However scams exist everywhere no matter where you go, and we just have to be savvy.
Most companies out there will not be scammers, but they exist and they make everyone else look bad. If you do your research and follow your gut, you’ll be able to confidently complete the sale of your property.