Not all types of scams can be spotted easily. You might find home buying scams and ripoffs over the phone, online or even on flyers and bandit signs in your neighborhood. You might also see signs that say “We Buy Houses” with a phone number attached to them.
“We Buy Houses” scams have been around for a very long time. However, these con artists boosted their game back in 2008 during the housing crisis. The reason why people would go for this scam is that it is quick and easy.
The process is so simple. You see an ad that says “We Buy Houses,” then call the number attached to it to help you get through selling your house fast. However, you will end up with odds that are not really in your favor.
The Reason Why House Buying Scams Are Rampant
As mentioned, home buying scams provide potential clients with an easy process. Anyone can advertise their house buying sites or phone numbers anywhere they want to get those desperate home sellers’ attention. Unlike legitimate real estate agents, no permit, certification, or license is required for someone to claim that they are a real estate investor or a home buyer. That is why house buying con artists are almost everywhere.
Scam Scenarios You Should Watch Out For
To avoid home buying scams, Sundae.com suggests that you should know how the process really works. Below are two scam scenarios you should know about:
Scam One Scenario
A seller will call a home buying company or broker that the seller thinks is legitimate. The phone number used to contact said buyer was taken from an ad that said “we buy houses for cash” or “we buy houses in any condition.”
Upon talking to the buyer, the seller finds out that an administrative fee is required before buying the house. The seller agrees to the charge and sends the amount requested. That is when the waiting begins.
The seller waits and then waits a little more for updates but will receive none. The seller then decides to call the buyer but gets no response. Furthermore, the scammer most likely changes their number and runs off with the money.
Scam Two Scenario
This scenario involves interaction with the scammer. The potential buyer (i.e. the con artist) who claims to be a legitimate real estate investor will offer to buy the seller’s house for, say, $70,000. The buyer will write a check amounting to $78,000 and give it to the seller.
After sending the check, the buyer informs the seller that they, the buyer, made a mistake and sent the wrong amount. The buyer tells the seller that it can be easily fixed, however.
To fix the issue, the buyer instructs the seller to wire transfer the extra amount that was accidentally added to the check. The buyer will be embarrassed and explain to the seller that this mistake has never happened before. If the seller chooses to believe the buyer, they’ll transfer the extra amount.
After sending the money, the seller discovers that the original check is bad and they’ve just wired $8,000 to a con artist. Furthermore, of course, the house is not sold yet.
Scammers have their tactics to convince you, especially if you are desperate to get things done fast. However, knowledge is power when it comes to these types of cons. The warning signs that your “buyer” is running a home buying scam include but are not limited to the following:
- The “buyer” uses a free email service—this most likely illustrates unprofessionalism;
- Can’t provide any references when asked;
- Use of bandit signs—it is vital to know that legitimate house buying companies don’t actually do this kind of thing;
- Unprofessional phone etiquette;
- Challenging to contact;
- Not using state-regulated files or professional forms;
- Offers to buy the house without even bothering to check it out;
- Provides questionable or sketchy references that can’t be verified;
- Gets offended or uneasy if you imply you want to take the contract to a third party for verification (an attorney perhaps);
- Can’t provide any certification or real estate license that illustrates knowledge or expertise in state and federal laws/regulations.
Below are the biggest warning signs that your buyer is really a scammer:
- The “buyers” requires you to provide a processing or administration fee first;
- Has the dedication to share their financials;
- Has the eagerness to send money fast without even bothering to look at the house.
In A Nutshell
Bogus home buyers take advantage of people every year. Although we would love to think that most people are honest, the real deal is that fake house buyers can be everywhere. Hence, you should know to think twice before selling your home to any buyer to ensure that they are legitimate and can be trusted.
If you want to sell your house fast, selling it to “we buy houses” companies is not the only way. There are many legitimate home buying companies that can help you out. Research will help you find them. Beyond avoiding home buying scams, selling your house the right way will help you avoid future problems.