Real estate scams are on the rise, posing a threat to homeowners looking to sell their property. Janet Robb, the President and CEO of the Better Business Bureau, warns that some offers may arrive unexpectedly or even before you list your house for sale. While these offers may appear attractive, particularly if they exceed market value, they often come with hidden terms when they sound too good to be true. By staying vigilant and informed, you can effectively steer clear of falling victim to real estate scams.
Learn how to spot the red flags.
To effectively identify potential scams or instances of real estate fraud, it is crucial to familiarize yourself with the most prevalent types of housing scams.
Be cautious of various scams that may involve individuals posing as real estate agents, investors, or intermediaries with supposed interested buyers ready to purchase your property at a premium price.
It’s essential to remain vigilant against common real estate scams that can jeopardize your home selling process and finances. One prevalent scheme involves fraudsters demanding an administrative fee or upfront tax payment before finalizing the sale, only to vanish after pocketing your money.
Another common scam unfolds when a buyer overpays you with a check and requests a refund for the excess amount. For instance, if your agreed selling price is $90,000, they might send you a $95,000 check, claim an error, and ask for $5,000 back. However, once you wire the money, their fraudulent check bounces, leaving you $5,000 poorer and still grappling with selling your property.
Additionally, scammers may target the wire transfer stage of a sale by impersonating individuals involved, such as your real estate agent, and instructing you to wire funds, including closing costs, before the closing date. To shield yourself from this deception, always verify any unexpected money transfer requests directly with the concerned party.
Lastly, some fraudsters employ a tactic of continually modifying contract minutiae to deceive sellers. By gradually introducing and altering minor details for you to sign off on, they obscure significant changes within the contract. Stay cautious and thoroughly review each contract revision to avoid falling victim to this ploy.
Tips on how to avoid scams
There are many ways you can protect yourself by doing your due diligence when selling a house.
- Check out the person you’re working with, including their website, Google Business Profile, reviews, and if they’re accredited by the Better Business Bureau.
- Verify that they have an actual physical address for their business. That’s a hard thing to fake for real estate scammers.
- Look out for unreasonable behavior from the buyer—in a rush to close the deal, pushing you to sign a contract, unwillingness to answer questions, difficult to contact, hesitant to have a third party look at the paperwork, etc.
- You should always receive the money for the sale or have the title agent or escrow officer verify the funds, before you sign over the deed.
- If there are fees involved (which is possible with some cash home buyers and real estate agent commissions), they shouldn’t be paid upfront even if they seem reasonable or affordable.
- There shouldn’t be any “hidden fees” that pop up after you’ve signed a contract.
- Even though most iBuyers mainly use digital communication, you should still meet someone in person before the closing.
- Don’t sign over the deed until closing. The buyer shouldn’t get ownership of the house until you receive the money for the sale.
- Don’t give bank information online or through email.
Know how real cash buyers work.
A great way to protect yourself from cash-for-houses scams is to understand how real cash home buyers operate. Here are the steps that a legitimate cash home buyer will take:
- You initiate contact with them and provide information about the house you wish to sell.
- They will schedule an in-person visit to assess the home and make an offer based on the condition of the house and the current real estate market. Typically, this offer will be made in a few days.
- They provide you with a window for a closing date, taking into consideration your needs and timeline. There shouldn’t be any pressure to sign the contract or to close faster than you want to.
- The contract should clearly state the terms and be understood by all parties.
- The closing should go smoothly, and financing should be in place before the closing.
If the process doesn’t include these general steps, you should be cautious. Buyers should want to see your house before purchasing it and be willing to meet you in person.
There’s only one solution- The Pathway Property Solution®.
Signs on the side of the road that say “We buy houses” may be from legitimate companies, but they aren’t from Pathway Property Solutions®. Be sure to verify you’re contacting Pathway Property Solutions® by using our online form or calling 608-571-7021.