One common scam we see is from wholesalers in the real estate industry. Real estate wholesale scammers have access to public information on people in pre-foreclosure or distressed situations with their homes. Unfortunately, they are taking advantage of an opportunity to catch you letting your guard down. There are many red flags you should look for if a wholesaler contacts you looking to buy your home with a cash offer. We will ensure you know the tactics scammers use to avoid being taken advantage of. Below are some red flags to keep in mind as a homeowner:
The buyer made a cash offer without seeing the house.
Ask questions immediately if this happens. Why would someone want to spend tens/hundreds of thousands of dollars on a home they know nothing about or haven't seen in person? They have spent no time assessing your property to make a fair offer. These wholesalers know that they can make a quick buck off people that are in a situation where they need to sell their home fast and are likely to take any offer thrown at them.
The buyer is putting pressure on to speed up the process.
A homeowner should never be pressured during the process of selling their home. When being hurried through the process, it may seem like the buyer is in a hurry to finish the deal and sneak something past you. The homebuyer should be reasonable and consider the seller's needs or requests. If the buyer negatively reacts to you requesting all necessary information, question their intent. A buyer with the right intentions always listens to the seller before making a fair offer for their house. Also, if you find yourself in the process with a buyer who is very slow to provide the necessary information, this is another red flag. As someone who buys homes for a living, the paperwork needed to close on a house should be readily available. Asking for proof of funds from the buyer is standard practice. If they fail to provide you with this information, back away from the deal, as you're likely dealing with a scammer.
The buyer wants to charge me a fee upfront.
Money shouldn't be exchanged until closing when you sign over the deed and only ever exchanged through a title, escrow company, or licensed attorney. Signing over ownership to the house before closing gives the fraudsters a massive opportunity to stick you with remaining payments on the mortgage AND give you no money for the sale of the home. You shouldn't pay any fee the homebuyer is charging until closing. If pressured to sign over the deed before the money is exchanged and cleared, consider that a major red flag. The buyer knows this is not standard practice, and they are trying to pull a quick one on you. It's essential to work with someone who is trusted.
There are many complaints online about this company.
It's crucial to research the company you are communicating with. If there are ANY complaints filed online or you can't find proof that this is an actual company, run away from the deal. Search websites like the BBB, Google, Facebook, and more from a simple search engine search to seek social proof of the credibility of this company. If there are complaints, you will often see similarities in the process you're in right now.
The buyer will not communicate in person.
Selling a home is likely the most significant sale you've made in your lifetime. It should require a personal relationship of some sort with the buyer. You should be comfortable with every step of the process and trust the buyer that they are offering you a fair price for your home, and the buyer is reliable when it comes to the funds for the home. Someone trying to buy your home and only communicating via email, seemingly unreachable by phone, is not someone you want to risk doing business with. Always work with someone who is accessible and trustworthy.
The buyer discourages me from discussing the transaction with my trusted professionals, friends or family.
The sale of your home is a big decision. Seeking out the advice of trusted people in your life should always be encouraged. Real Estate transactions are sometimes complicated, and leaning on your support system through the process is vital for your peace of mind. Often, it's helpful to have someone you trust who can help you ask questions and ensure that your interests are protected.
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