Keep from Falling Prey to “Buy My House Scams”
Estimated reading time 7 minutes
When you’re ready to sell your home, there’s the temptation to sell it as soon as possible. Then you can move and settle into your new life that much faster. However, if you’re solely focusing on a quick sale of your property, this could put you in danger of falling prey to scammers.
It pays to consider who you’re dealing with when selling your home. There are many scammers who run cash for home scams, which are, in reality, home buying scams. These may be companies promising, “We Buy Any Home.”
Keep in mind that selling your home is a huge financial investment. It pays to take steps to conduct the sale in the right way and only deal with reputable property buyer organisations or companies. To keep from becoming a victim of real estate scammers, there are some steps you can take to stay safe.
Which House Sale Scams are Out There?
Here are some of the house sale scams to watch for when selling your home for cash.
1). Unrealistically High Offers
Be wary of any individual or company that promises to want to buy your home fast. The reason is that their offer may be unrealistically high to get your attention.
It can sometimes happen that after they grab your attention, the deal will fall through as it nears becoming final. At the last minute, these unscrupulous individuals and companies may say they want to reduce their offer and the amount they’ll pay.
This is a common problem when home sellers are desperate to sell their homes quickly and for cash. Some individuals may be wanting to stop repossession or need to sell quickly for other reasons.
2). Is the Buyer a Real Cash House Buyer?
There aren’t that many real cash house buyer companies on the market. This means that many of the ads you see and hear may not be real. The fact is that these individuals or companies may not have the money needed to buy your home quickly. What’s more, they may not be able to provide you with the professional services you need and deserve.
There are individuals and companies who merely pretend to be real cash buyers. In reality, they’re nothing more than sellers of inquiries. This means they are quick-selling estate agents who operate as sellers. They find your home and pass the sales details on to someone else. You end up not really negotiating with the person or entity who said they would buy your home for cash. Instead, you work with a buyer who can’t provide you with the honest and complete services you need to sell your home.
You may not even realise this is what has happened until later in the sales process. By then, it’s too late. What’s more, these individuals may not have the cash on hand to quickly purchase your property. Instead, they may have to wait until they receive funding by obtaining a mortgage or loan, sell another property to get the cash, and more. This means the sale of your home could take quite a long time, which causes delays for you.
3). Unregulated Sale & Rent Back Scam
There’s another scam that’s quite common when selling your home for cash. It’s imperative to watch out for an unregulated sale to a buyer, who then rents your home back to you.
If you’d like to find this type of deal, that’s legal. However, you need to ensure the company or individual you’re dealing with is reputable. You can do this by dealing with a reputable FCA-approved Sale & Rent Back firm.
4). “We Buy Any House” Scams
Another common problem is the “we buy any house” scam. This is most often a problem for those who would like or need to sell their property quickly. These are sellers desperate to make a sale, which makes them more vulnerable to this type of scam.
The reality is that while these businesses promise to pay cash for your home, there are several issues that can happen:
The offer drop: here, the scammer makes a bid but doesn’t really plan to purchase your property. Instead, they try to use your home to offer a service. They are actually in the business of finding homes at a discount for their own buyers. These organisations charge their customers high fees.
In this situation, they make an offer on your house that seems to be legitimate. However, as you take your home off the market and prepare to move, the buyer then suddenly says they no longer want to pay the agreed price. Instead, they want to pay less—usually quite a bit less. In this scenario, most people would go through with the sale. However, doing so means selling your home way below market value.
Valuation scam: here, the business offering cash for your home wants to have a property valuation just to make sure your property value is acceptable and correct. Most home sellers would go ahead with this with no problem. However, the problem is then this business turns to you and forces you into using their preferred valuation firm. You have to pay a much higher fee than normal (usually about double).
What happens is the valuation firm comes up with a valuation that’s much lower than your asking price. Now you’re trapped into accepting a lower value for your home or walking away. Walking away means starting the selling process all over again. So, many home sellers just accept the deal rather than going through the entire sales process again. This means they receive less for their property and are stuck paying a higher valuation fee than normal.
Check Out Potential Buyers
To avoid these issues, it’s a good idea to do some due diligence about potential buyers. Then you’ll have more information on whether or not the individual or company is legit or a scammer! If you’re satisfied that they are truly a reputable cash buyer, then you can feel good about going ahead with the sale.
Here are some tips to help you find the right cash buyers and avoid scammers:
- Ask if they will show you proof they have funds available to purchase your home.
- Ask for real testimonials and/or reviews from past customers. Does the firm seem to have a reputable image and credibility?
- Is the address they’ve given you an office? Will they agree to meet you at their office if you make an appointment? If so, how do you feel after the meeting?
- Are they part of the TPOS (The Land Ombudsman)?
- Are they members of the Property Buyers’ National Association?
- How long have they been in business?
- Who are the managers and/or business owners behind the firm? After receiving this information, proceed to check these individuals, too.
After going through this exercise, then ask yourself how you feel about the individual or firm. We can only recommend going with your gut instincts. If anything feels off or wrong in some way, then step away from this firm or individual.
Avoiding scams may seem like a lot of hard work, but it’s worth the effort in the end. Doing your due diligence can help sell your home to a reputable cash buyer, which means you get on with the next part of your life that much sooner!
Are you looking to sell your house. Find out why BetterMove is the better way to sell your home.