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The Top 5 "We Buy Houses" Scams

Monday, November 14, 2022

When it comes to selling your home, the internet can either be your best friend, or your worst enemy. Unfortunately, the housing crisis of 2008 opened the door for a plethora of “we buy houses for cash” scammers to enter the market, leaving honest home sellers very vulnerable.

Living in today’s digital age, it is more important than ever to understand the difference between a scam vs. a legitimate offer, and what to look for when shopping for offers to sell your home.

Sometimes you can even be hit with ads when you’re not looking to sell your home, leaving you wondering “Why am I getting unsolicited offers to buy my house?” Not every scam is as easy to spot as the classic “Your home is worth millions if you click now!” pop ups, but there are a few tell-tale signs of a “we buy homes” ripoff that you can look out for.

Top 5 "we buy houses" scams

1. Upfront costs

Say you see an advertisement for “We Buy Homes For Cash” - be it a popup ad on your computer, a sign on the street, an ad on TV, etc. - so you call the number to inquire about selling your home. If the “buyer” on the other end says there’s any sort of upfront “administrative” or “processing” fee you need to pay for them to provide you with an offer, hang up!

This is a sign that they’re likely a scammer and not a legitimate broker, trying to dupe you with a we buy houses ripoff scheme. In a home sale transaction, the money should always flow towards the seller, not away. This means that any legitimate real estate buyer should not be trying to entice you to send any sort of funds to them, even in small amounts; after all, it is you who is selling the home!

2. no professional details

The home buying business deals with large sums of money, so it’s critical that your buyer is able to provide authentic and legitimate credentials around their business. If they seem to be unwilling to do so, it may be a red flag that they’re trying to trick you into one of their we buy houses scams. Some easy things to look for to ensure professionalism include:

     i.) Credentials! First and foremost, you should make sure they have certifications ensuring they have business being in the business of buying houses. Always ask yourself “Are those we buy houses legitimate?” and ensure you can confidently answer YES!

     ii.) Do they have a website? An authentic home investment business should have an established website that you can refer to, listing out their experience and referencing their buying history.

     iii.) Are they able to provide you with references? If they’re legitimate, they should be eager to provide you with some of their history in the market to showcase their authenticity and success rate as someone you’d like to do business with.

     iv.) How easy are they to contact? Are you having to go through a third party source to reach them? Are they online only with no phone number or business address to reference? Real buyers who are looking for homes on the market should be making themselves accessible and easy to reach, not the other way around.

3. pushy timelines

The average “We Buy Houses” process should take about 1-8 weeks. If a “buyer” starts pushing to buy your home as quickly as possible, urging you to sign immediately and pressuring you into the situation, there is definitely cause for concern. A reputable investor or cash buyer should be more interested in understanding the full scope of the situation that has led you to want to sell your home, working to gather all the information including the original build of the property, legal rights tied to the home, photos of the interior, and so on.

After all, they are the ones who are preparing to make a sizeable offer for your property, so they should be interested in ensuring their dollars are going towards a viable business decision. Would you want to put tens of thousands of dollars into a situation you don’t understand fully? Of course not. This is why it’s crucial to watch out for the details to make sure you aren’t duped by a we buy houses ripoff scheme.

4. waiting...waiting...waiting...

On the flip side, you should not be left waiting to hear back from your investor on next steps, as they may be stringing you along in one of their we buy houses scams. A genuine buyer may be looking to offer you an initial deposit as a sign of good faith or as a way to establish a baseline agreement between you for the buyer-seller relationship. Or, they may provide you with proof of funds as another method to establish their credibility as a serious offerer. The start of the relationship should work to establish credibility, trust, and intent for follow through for a mutually beneficial business transaction.

5. the gut check

A lot of the time, intuition plays a bigger factor than people give credit to. Home investors tend to want to cultivate a positive relationship with the seller, working to make them feel comfortable with the transaction and happy to address any questions about the process. They tend to have experience with customer service and client management, understanding how to provide a positive experience as a potential investor for your home. Unethical we buy houses scammers are out there, and more often than not, they will show their true colors if you give them the time to.

If a potential home-buyer starts to come across as brash, short tempered, or impatient, it is likely a sign that they may be one of the fake house buyers trying to push you into their scam as opposed to being genuinely interested in purchasing your home for the value it deserves. Your questions deserve to be answered, and you should always feel comfortable throughout the process without worry of being snapped at or shut down. It is well within your right to feel completely comfortable with your decision to sell before signing the dotted line.

in summary

In summary, an authentic “we buy houses” investor will look like:

     i.) Someone who isn’t trying to impose costs on you
     ii.) Someone who is happy and eager to provide you with their credentials
     iii.) Someone who isn’t trying to get you to decide too quickly
     iv.) Someone who doesn’t leave you waiting
     v.) Someone who makes you feel comfortable and confident doing business with them

If you’re looking to sell your house the right way and want to see how cash offers for houses are legit, reach out to one of our sales representatives at Young Realty Inc. We pride ourselves on transparency and honesty throughout our purchasing process, with a team of qualified real estate professionals who are trained in best-in-class customer service to ensure you receive the home selling experience you deserve. To learn more about how we do business, read about our process or call us at (416) 913-1089.

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