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How to Spot a Home Buyer Scam

How to Spot a Home Buyer Scam

If you are in the process of selling your home, chances are you have been approached by at least one home buying company, if not more. Home buying companies are very tempting to consider, because they send somebody in to make a cash offer for your home. The problem is, not all home buying companies are legit; sadly there some that are nothing more than scams!

If you are looking to sell your home fast there are a few things you need to know if you want to spot the difference between a home buyer’s scam, and a legitimate quick home buyer:

#1 Ask for proof
This actually needs to be done in two different ways. If somebody approaches you offering to buy your house as a cash investor, you want to make sure that they can actually buy the house, but you also want to verify their intentions. If they really want to purchase the home ask them to put down a decent down payment, 5% of the asking price is a good number. If they pay with a check place the check in a title company’s escrow account as soon as you receive it and then check to see if it has cleared.

You will also want proof that they have the money available to purchase your home. Funds can be cash or a loan funded in the buyer’s name. In either case, you want to check to see that the funds are available. For a loan, ask to see the proof of funds letter from the lender, if its cash ask to see a statement from the bank showing the cash amount available.

#2 Look at credentials
Another way to spot a scam is by looking at the person and the company they represent carefully. It really is up to you to find out if the company is legit or not. Luckily, it is pretty easy to do and just requires a little time and effort on your part. Make sure you get the name and address of the company they are representing and then do some digging on the internet. A quick Google search can provide you with some basic information, but you should also check with the Better Business Bureau and any consumer protection agencies in your state to see if they have any complaints. You should also check out their website, scam artists often copy the website content and advertising techniques of industry leaders.

# 3 Too good to be true
Perhaps the biggest sign to look for when spotting a scam is when a company is making offers that are too good to be true. Many of these companies will make promises that simply can’t be kept, such as stopping a foreclosure, encouraging you to file bankruptcy, asking you sign your house over to them before compensation etc. If something they say doesn’t sound or feel right to you, do your research and make sure it’s not a scam.

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