Are Sacramento We Buy Houses for Cash Companies a Scam ?
June 13, 2020
Are Sacramento We Buy Houses for Cash Companies a Scam?
We Buy Houses for Cash Companies a Scam ? You know the old saying, “if it’s too good to be true, it probably is.” This is one of the reasons many home sellers are worry about dealing with companies offering to pay cash for their homes. While avoiding houses for cash companies isn’t necessarily a bad idea, you could also be missing out on a legitimate opportunity to get a fair price for your home.
If you’re looking for special terms that suit your needs, you can sell quickly and have access to the cash right away. The main problem with the idea of ads stating “We buy houses in Sacramento for cash” is that there are many less than honest people out their looking to take advantage of people in need of quick money. With that in mind, we offer some tips on how to spot the scammers and find a trustworthy real estate investor ready to help.
How to Spot Real Estate Investment Scams
First, make sure you recognize the signs of a potential real estate scammer:
- Someone who asks for “fees” upfront
This is an oldie but a goodie. The investor asks you for a fee to either assess your home, or to cover fees to manage the closing process. Either way, they want this money upfront. Never, ever send money to anyone offering to buy your house for cash. You are the one owed the money in this situation. Any associated fees are deducted from the offer price to purchase your home. Legitimate company’s services are free, from the assessment to the final sale. You get an offer less any fees, so you always know the final amount. With honest companies, you will understand the fees upfront, and they’ll explain the process if it is unclear.
- They make you sign a contract
While legitimate buy for cash companies will give you a single payment for your home, some might take the step of having you sign a contract. These scammers offer to buy your house when they are still trying to find an investor. These “bird dogs” will say they have tons of buyers and then leave you hanging while they scramble to find one. In the meantime, you’ll not only be left waiting, but also be given far less for your home when they do eventually find one.
- Buying the house sight unseen
We never buy a house we haven’t seen first. If someone is offering to do this, there is a higher risk you could be walking into some form of a wire fraud scam.
- Gut feeling
Never underestimate a gut feeling something’s just not right. Your radar might go up because criminals and dishonest people often have trouble hiding their bad vibe. In many cases, the vibe comes along with a too good to be true offer, way over the going rate for Sacramento homes like yours.
Taking Advantage of Distressed Sellers
Another scammer to watch out for is the unscrupulous wholesaler looking to take advantage of distressed sellers. A real estate wholesaler contracts a home with a seller, under the premise they will find a buyer. Unlike a real estate agent or buy for cash investor, the wholesaler contracts the home with a buyer at a higher price than what they pay you.
They keep the difference. Their ideal “prey” would be someone with financial issues who desperately needs to sell their home to pay off debt or avoid a foreclosure on their mortgage. However, they aren’t picky when it comes to vulnerabilities.
Common Scammer Moves
There are also some signs you can watch for when dealing with dishonest wholesalers and buy for cash companies. First, they tend to make grand gestures and promises they will never keep. They will string you along during the process with excuses after making an impressive presentation that includes a higher offer then you’ve heard anywhere else. Unfortunately, this number is meant to lure you in.
Once you’re hooked, they’ll play the waiting game and come back to say they no longer want to pay out the agreed-upon amount and begin to renegotiate with low-ball offers. This is often the only choice you have at this point because they’ve dragged the process on just long enough for you to lose most of your leverage.
What is a Property Investor or Investment Group?
Legitimate property investors or investment groups seek real estate deals that will make them money down the road. In some cases they might buy land and hold onto it until its value rises, then sell. They might also invest in properties with intent to rent them out to earn a regular income. There is also the popular real estate “flip” in which investors seek properties in disrepair, invest their own money to make the necessary upgrades and then sell the home with the goal to profit from the difference. These investors are legitimate, and will often offer to buy houses for cash. However, there are also some scammers looking for desperate sellers willing to take their low ball offers.
How to Choose A Legitimate Service
The internet makes it a little easier to find a legit buyer for cash. Thanks to reviews, you can see what people are saying on sites like Google or Yelp. Facebook also allows customers to comment on their experience. You can also ask for references and take the time to talk to former customers. Websites are a good place to get started as they often have comments from past clients. If they are only offering online service and don’t provide an alternate form of contact such as a phone call, they might not be as trustworthy.
Make sure you can speak to someone, and arrange for them to visit your home for an actual onsite assessment. These companies also require a realtor/GC license. An honest company will back up its services with a written guarantee to ensure the price and closing. If the offer falls through, they might even offer some form of compensation.
If you’re ready to work with a property investment group like Property Sales Group, check out our reviews and find out why over 750 Sacramento-area homeowners chose us. We will provide a fair hassle-free offer after an assessment and offer a free in-person consultation to explain the process. To protect our clients we also have a $5K guarantee. Give us a call today to set up your consultation.