We’ve all seen the handwritten signs on the side of the road…
“We pay cash!”
“We buy ugly houses!”
It’s hard to pass up those offers when you’re in a bind or want to sell your house quickly. It’s also appealing to think that maybe, just maybe, you could avoid the lengthy, expensive home selling process. It requires a good amount of work to clean, stage, and maintain your home for sale.
However, many of these roadside offers are we buy houses scams. So, how do you know what’s real and what’s not? Let’s run through some of the most common we buy houses scams and how to avoid them.
5 Most Common We Buy Houses Scams
There’s a big difference between buyers and scammers, but it’s not always easy to tell. Here are the 5 of the most common we buy houses scams. Once you realize how predictable these methods are, you’ll know how to identify them.
1. Bait and Switch
This classic con applies to we buy houses scams, too. After you enter into a verbal agreement with the buyer, they present you with a contract that they claim is just a formality. You would hope this contract is something resembling your verbal agreement, and the buyer is hoping you’ll simply skim it instead of reading thoroughly.
Between the time you sign this document and the closing date, the buyer will have you sign a few minor changes that they call tweaks. This leads you to believe they don’t affect the contract at all. By the time you get to closing, you’re stuck in a contract that looks nothing like your verbal agreement at all.
2. A Helping Hand
These companies claim to buy your ugly home or get you out of your upside-down mortgage payments fast. They say they’ll buy your house, catch up your payments, and let you take the payments back over after you’re caught up.
Once you’re ready, they will sell the house back to you at a reasonable price. However, the contract you sign is full of clauses that state they can take possession of your home in a variety of cases. One of these cases is that they can claim the home if you’re ten days late on a payment. If you slip up or make any mistakes at all during the contract period, you could lose your house for good.
3. Equity Skimming
This common we buy houses scam starts with you transferring the deed of your home to a buyer. While this buyer holds your deed, they never actually assume any liability. You continue to make payments to the buyer and stay in your home while they use the equity to take out major cash loans or lines of credit.
Once the credit is dried up, the buyer stops making the mortgage payments and skips town, leaving you with a foreclosed home and terrible credit. They can also sell the home right out from under you and never pay the bank for the outstanding balance.
4. Liberian For Sale by Owner
This scam involves a person outside of the United States telling you that he or she plans to move to the U.S. soon and can pay you cash for your home. They likely found your listing on a for sale by owner site. You think you’re helping someone out and selling your home, making the deal sound pretty compelling.
However, all this person is trying to do is get you to send them money or gain access to your bank account so they can transfer funds to themselves before you figure out what’s going on. If your money is transferred outside of the US, it can be impossible to recover them.
5. Bird Dogging
Some buyers will claim they want to buy your home, and they’ll even make you an offer and draft a contract. The problem is, they’re not buyers at all. All they’re buying is time until they can get an investor to bite on the deal. They may be marking up the price of your home and selling to someone else. If no investor is interested, the contract falls through. You’re then left with wasted time and no sale.
How to Avoid We Buy Houses Scams
The best way to avoid scams is to look out for one of the five flags above. We buy houses scams start with the sign you see on the side of the road. They’re innocent enough. They give you just a little nudge and plant that seed of wonder.
Instead of dealing with these shady people, try to sell your house to a legitimate company. Ask for their office number and work email address. See if they even have a physical location.
Be wary of anyone offering to buy your home if you can’t verify their credentials. Don’t fall for anyone putting on a seminar on how to make cash fast. You should be able to find their credentials and reviews online.
We buy houses complaints are everywhere. Thoroughly vet the company wanting to buy your home for anything that looks suspicious, and if you have any doubts at all, do not sign their contract.
Final Thoughts: How To Avoid We Buy Houses Scams
There are tell-tale signs all along the way that will lead you to the right conclusion if you listen to your gut. Be aware, ask the right questions, and don’t let the buyer pressure you into anything. Selling a home is hard work, and there’s no way around it. If you need to sell your home fast, work with a proven, legitimate company that buys houses like House Buyer Network™.
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