‘We Buy Houses’ Scams and How to Avoid Them

Posted on: July 24th, 2017 by , No Comments

Have those advertisements for people saying, ‘We Buy Houses’ caught your eye and made you question whether they are “We Buy Houses” scams? This is a very real concern for people considering this kind of service.

we buy houses scams signs

Trying to sell your house fast in Hampden County? Are you concerned that you might get taken advantage of and you’ll never receive the cash you were promised?

Join the club.

The traditional way to sell a house is listing through a real estate agent.

More and more people are seeking to skip the hassles and sell to LOCAL cash buyers instead. Every year, thousands of people sell their homes directly to investors rather than listing with an agent. In fact, nationwide, 5.5% of home sales were to investors according to a report by RealtyTrac.

If you’ve never sold a home before or never sold one without the services of an agent, it can be quite scary. It’s downright overwhelming!

I’m going to share some tips so you can prevent any house buying SCAMS from happening to you. By the end of this article, you’ll be armed with a proper checklist to better know, “who’s” buying your house.

The Sniff Test For We Buy Houses Scams

There are several legitimate house buyers through Hampden County, but be aware of the scams. It can be difficult to know which one you might be dealing with.

The stakes are high. People have lost lots of time, money and even their houses to scams run by investors that don’t have any sort of moral compass.

It can be difficult to determine if the investor you’re dealing with has your best interests at heart. Most of the time there are “tells” that will clue you in to their true intentions. If you see any of these signs, you may be in a “We Buy Houses” Scam.

 

  1. Application Fees – If a house buyer wants you to pay them any kind of fees to evaluate your house, run away as fast you can. This person is likely a scammer. Honest home buying companies don’t make money charging application fees. They make their money from buying houses, fixing them up and either renting or selling the house.
  2. Kitchen Table Closings – If a buyer wants you to sign over the deed to your house anywhere other than a title company or attorney’s office, you’re likely going to be making a costly mistake. Any sale and ALL sales should happen at a title company so that you can make sure the paperwork is handled properly and all liens are taken care of.**Please do not mistake this for signing a contract to sell your house. That can and probably will happen at your house. Just don’t sign any Warranty Deeds, Quitclaim Deeds without the services of a real estate attorney or title company.
  3. Too Much Information is Given – Phony bank statements and pre-approval letters for loans are given without being requested from untrustworthy real estate investors. These investors present these documents to make them appear legit but these documents can easily be faked.This occurs a lot when the supposed “investor” lives in a different city and communicates almost entirely by email. I don’t know about you, but I’d rather work with somebody local and meet face to face. Just because they’re not local doesn’t immediately make them a scammer, but I sure would rather know who I’m dealing with.

Scammers Don’t Always Look and Act Like Used Car-Salesmen

used car-salesman

It’s not always easy to pick out who the scammer is in a crowd.

Sometimes it’s the overly nice gentleman.

Sometimes it’s the straight and to-the-point woman.

Don’t let your guard down just because someone smooth talks you. You need to get the facts about who they are and what they can do for you.

We will discuss exactly what to ask for when determining the right house buyer for you later in this article.

It may seem impossible to determine whether someone is genuine or running scams…but it’s not.

One way is to trust your gut. If something doesn’t seem right…it probably isn’t.

Another way is to determine whether their actions match their words. Actions always speak louder than words and I’ve found them to be very telling about people.

If a Hampden County investor says he or she is going to meet you at your house at 2:00 on Wednesday and they show up at 2:20…they might not be trust worthy. They certainly don’t value your time or respect it, and if they can’t follow through on this minor task – there may be larger problems ahead.

If they walk through your house using harsh words describing it’s condition or your situation, you’re probably dealing with someone who could care less about your feelings and what you receive in the deal. There’s ALWAYS a way to be honest with a homeowner without being disrespectful.

Harsh words about your house are solely intended to force you to lower your opinion of the value of the house. This type of investor may as well be wearing a plaid suit and lots of gold chains. They are worse than a used car salesman…

A respectable and reputable real estate investor will always treat you with respect. They will show up on time and show empathy. When viewing houses, trustworthy house buyers will look for the positive aspects of the house as they know full well they will be making repairs and breathing new life into the home.

How to Avoid These Potential Scams

Do your homework to avoid we buy houses scams.

With some quick research you can easily determine whether somebody has a history of doing what they say. You can also find out if they’ve been in business for a while which shows they are stable and worthy of your business.

Crooks rarely stay in business long and almost always have negative reviews.

  • Check testimonials – Be sure to look for online reviews and testimonials for the house buying company you are considering. Any reputable business will have statements from previous customers that can attest to how they do business. Take a look at them for an example of the types of things you will find for any honest business owner.
  • Check the Better Business Bureau – The Better Business Bureau (known as the BBB) allows consumers to leave reviews and rate local businesses. You should only work with house buying companies that have a strong rating with the Better Business Bureau.If a company is not rated with the BBB you can not have as much faith in their ability to do what they say.
  • Check how long the company has been in business – Great businesses have been around for a while. According to the Small Business Administration, nearly one third of all businesses fail within the first 2 years. If you find a business that’s been around for longer than 5 years, you can probably bet they are still around for a reason. They probably are doing something right.
  • Make sure to close at a title company – There is so much legal talk in contracts and deed documents that you simply must have a title company or real estate attorney handle the closing.This is to ensure that everything is done properly. The last thing you want is for something to be done incorrectly that you have to deal with years down the road. You could even run into a situation where you’re sued because something wasn’t handled properly.Title companies provide title insurance that will protect you from most of these problems. It’s definitely worth it.
  • Don’t sign documents you don’t understand – This one seems to be common sense but is definitely not common practice. If you don’t understand something, don’t sign it.This is also where a good real estate attorney or title company can be worth their weight in gold. They should be able to break it down for you in layman’s terms so that you know what you are getting into. Great house buying companies will also take the time to clearly explain everything you are agreeing to in a way that makes sense to you. If you find you are working with someone not willing to do that, don’t work with them. Find someone else that buys houses.

Conclusion

When selling a house fast to local house buying companies, you should be aware of the potential signs of the ‘we buy houses’ scams.

Armed with the knowledge from this article you are much better prepared to find a great house buyer that will treat you with respect and do what they say they’re going to do.

If you would like to get a fair cash offer for your Hampden County house, do not hesitate to give us a call at (413) 650 6486. We would be glad to answer any questions you have and help you in any way we can.