SCAMS BULLETIN Host Jay White is a volunteer attorney who provides free legal services for low income seniors in San Mateo County, California.

July 8, 2019

WE PAY CASH FOR YOUR HOUSE SCAM

“We pay cash for your house” You’ve probably seen those signs posted on streetlights, planted on empty lots, increasingly on social media sites or mailed directly to you.

If you’re in a hurry to sell, or having difficulties attracting an offer, it may seem like a tempting deal.

These guys are known in the real estate business as “opportunity investors.” Their “opportunity” is someone else’s distress – victims of foreclosure, divorce, bankruptcy, or other urgency.

If you are diligent and take the right steps to check out the cash buyer, you might cut a deal that at best gets you out of financial trouble. But you won’t get the price a regular realtor might land for you. On the other hand, you won’t pay a commission and other escrow charges.

According to one report the average cash offer is about 65 percent of a home’s fair market value (FMV) that a legitimate realtor might obtain. The “buyer” will then almost certainly relist your home and since, unlike you, he’s not in a hurry, earn himself a fat profit. Oh, and he’ll make you sign a contract that prevents you from seeking any further amount after the sale.

Their tactics usually involve pitching an offer that matches your outstanding mortgage and other debt (if it’s not too high). They know how tempting it sounds.

How to Minimize the Cheats:

*Have your home professionally appraised so you’re in a better position to judge the value of the offer.

*Check out the reputation online of the cash buyer. In particular, watch out for so-called “bird-dogs” – people who are just trawling for potential business, selling your contact details to investors.

*Ask for references, such as details of houses they previously bought, with names of the sellers. And ask for the buyer’s bank details so you can check that they even have the money. Some disreputable buyers have no cash but try to borrow it from a bank once they prove they have a good deal lined up.

*Be wary about any company that charges fees for processing or administration. This is not the norm in the real estate business.

*Beware of offers-to-buy “sight unseen.” If you get an offer from someone who hasn’t seen your home, it’s almost certainly a scam.

*Watch out for an advance check fraud. A scam buyer will send a dud cashier’s check and ask you to deposit it and forward part of it to a designated person to cover fees.

If you follow the instructions, you should expect what happens next: You deposit the dud cashier’s check in your bank account, forward money from your bank account, then the check bounces. You end up reimbursing your bank out of your pocket at a time when you can least afford it.

Attribution: scambusters.org