If you’re currently looking to sell your property fast, cash home buyers will stand out as a potentially attractive solution. Before taking this path to a quick sale, though, knowing how to avoid house buying scams is essential. After all, there are many we buy houses scams in California, and falling victim to them could cost you dearly.
Here at Premier Property Buyers, our simple three-step process makes us one of the most trusted home buyers California has to offer. Whether you use us to sell your home or not, this guide will help you avoid common cash home buying scams for a safe and efficient sale.
As per Forbes, real estate scams now cause financial losses that outweigh those attributed to identity theft, extortion, or ransomware. For buyers, the biggest threats come from scammers posing as real estate agents and attorneys.
For sellers, we buy house scams typically occur when scammers attempt to take advantage of a seller’s desire to sell a property fast. This could be due to falling behind on mortgage payments, being unable to cover necessary repair costs, or a sudden change in circumstances. In any case, scammers prey on vulnerable homeowners who may be more vulnerable to rushing processes without scrutinizing them.
Scams usually involve “buyers” who appear like legitimate companies but will look to steal money or complete a transaction that isn’t as it first seems. With 9% of all fraudulent activities coming from the real estate market, anyone looking to we buy houses companies instead of a traditional home sale must take extra care.
When companies target homeowners with fake cash offers, they typically use the following three-step process:
In many cases, fake buy houses companies also use pressure tactics like getting you to sign a contract that states you won’t sell the property to anyone else. They may subsequently implement an equity skimming scheme while buy and hold investors may opt to offer an unfair price before looking for potential buyers at a fair market value. This allows them to profit from the difference in the purchase and sale price.
As well as knowing the red flags and tactics used by scam companies that buy houses, it’s equally crucial to know the defense tactics to avoid cash buyer scams. Here’s how you can stay in control.
Researching cash buyers is a crucial first step. You should check that they have a professional website while also checking for a physical address. A company with a long history is likely to be a genuine company that makes legitimate cash offers while asking a real estate attorney whether they know the home cash buyer can be useful too.
Confirming the credentials of companies that pay cash to buy houses can mean searching for the business with the SEC. Similarly, any accreditations can be easily confirmed or denied either through research or by asking the cash buyers to show proof. Reputable cash buyers won’t lie about this sort of thing.
Positive customer reviews show that other home sellers in California have gained a fair selling price through the company, and shows that you can too. It should be noted, however, that up to 50% of online reviews are either fake or manipulated. So, you must investigate whether reviews are valid.
When speaking to businesses that buy houses for cash, scammers and dishonest firms will be a little more secretive as they try to hide the red flags surrounding their cash offer. You can combat this by asking key questions.
Many we buy home scams come from companies that do not have the funds to complete the cash offer. So, asking to see a bank statement or relevant bank account information to prove that they have the resources to buy houses is highly advised. A legitimate real estate investor will happily provide this info.
Over 260,000 (and up to 442,000) homes are sold in California annually, and a growing percentage of home sellers are open to cash buyers as the process can be completed in as little as two weeks. However, you must confirm the process with your proposed cash buyer while also checking that they will use a local Escrow Title company. If they can’t provide this insight, a scam is likely.
While there are many we buy houses scams that real estate sellers must understand, it should be noted that many legitimate real estate investors who buy houses for cash do exist. The best companies that buy houses for cash provide an alternative to the traditional sale method of using a real estate agent and are particularly popular for sellers hoping to sell the home as is.
Legitimate cash buyers will protect you from we buy houses scams. Moreover, they make a genuine cash offer for your property and are as professional and trustworthy as any traditional real estate agent or traditional house buyer.
The best cash buying houses companies will provide a highly professional and convenient approach. They will typically:
We buy houses scams are far more common than many people realize, which is why knowing how to distinguish them from genuine deals. The best buy houses companies will provide the following:
The home buying company should be transparent at every step of the journey. Any sort of secrecy should be considered a red flag. Ultimately, if your gut instinct tells you that the cash home buyers are not providing full details, your suspicions are probably right.
If a cash buyer tells you that they will pay a certain cash fee for your home but have not put this down on paper, it’s likely a scam. Meanwhile, you should always read any contract before signing it and seek legal advice regarding any clauses that seem unclear or unfair.
Most people looking to sell a property will at least consider cash home buyers. Before making any decision, though, it’s important to consider the pros and cons.
Unlike using the open market, you won’t have to spend time preparing the property or marketing it. Similarly, you won’t be delayed by buyers working with their mortgage company or a chain of properties. On average, marketing and closing take 68 days in California. As well as added speed, this approach allows for funds to clear far sooner. This allows you to clear debts or take the next financial steps with far greater confidence and convenience.
In addition to securing a faster sale, an as-is sale allows you to relinquish the asset regardless of its current condition. Cash buyers will buy ugly houses and distressed properties, even when a traditional real estate agent may not be willing to take on the job. In turn, you will have more flexible closing times and a far simpler process. It can be very beneficial when you want to sell the home fast, due to circumstances or because it was an inherited property.
While using cash buyers allows you to get the money upfront as soon as the sale closes, the selling price may be a little lower. Even legitimate buy houses companies must give themselves an opportunity to make money, even if they have to wait a lot longer than you would. Still, when you take the removal of marketing costs and hidden fees into account, a cash offer made based on a genuine valuation represents a fair deal. Traditional sales are longer but potentially open the door to more buyers.
The infamous $55m mortgage fraud scam wasn’t the only threat in California. Working with legitimate house as-is buyers who operate from a physical address can help mitigate the risks. Scams that intend to steal money and sensitive personal information are an ongoing threat. Meanwhile, the aforementioned tactic of trapping sellers into a contract before lowering their cash offer looms large too. It is particularly important to stay vigilant if the cash buyer approaches you with an ad.
A wholesaling scam is when the cash buying company isn’t the actual buyer. They subsequently look to find potential buyers, delaying you until they do and lowballing you in the process.
A cash-buying company that does not have capital available is unable to close. They will then need to find a lender and essentially want to use equity skimming and leverage success from an asset that should be yours to benefit from.
The renovation scam of reducing the offer price after locking you in is arguably the most common and may force you into accepting a far lower sale price than you deserve. Given that the average property price in California exceeds $800,000, even a 10% loss could be life-changing.
If the company doesn’t have a physical address in the local area, they could potentially run off with funds at any given moment.
Finally, the fraudster may simply try to trick you into handing over money courtesy of an upfront fee. Don’t.
When speaking to cash house buyers, seeking proof of verified transactions can help prove their legitimacy. A company that has worked with multiple clients can be trusted, especially if they have positive customer reviews to back it up. You can use various online tools to crosscheck the sale date of a property too.
Legitimate companies who help you sell a house fast are more than happy for you to seek legal advice because they have nothing to hide. Legitimate operations will use fair and valid contract terms, which your legal advisor will confirm. You will then be positioned to enter the process with a full understanding of what to expect.
The main categories of cash home buyers are real estate investors and property flippers.
A real estate investor could be a long-term holder who wants to benefit from the property’s appreciation, a landlord looking to increase their rental property or a property developer. Ultimately, their intentions shouldn’t interest you too much as long as you gain a quick sale and fair price.
Flippers are often house buying companies. They pay a cash sum that is around 75% to 90% of the market valuation and then look to sell the property once it is theirs. Their net profit is the difference between the purchase price and sale price but saves you from the stress of a standard sale.
Genuine companies and real estate investors that allow you to sell your house fast are an increasingly popular choice. However, you should not overlook traditional sales through estate agents. Analyzing your options will allow you to reach the smartest conclusion.
When taking this path, you must consider the following:
At Premier Property Buyers, we proudly offer fast and convenient cash purchases. As a local company, we pride ourselves on supporting homeowners across the Golden State while we also help you avoid commissions, fees, closing costs, and repairs. If you are looking for a local cash house buyer in Los Angeles, we are a top choice. We cover all of Southern California so if you need to sell a house in Riverside, or get a cash offer for a house in Anaheim, we can help there too. Of course, you can also take the furniture and interior design features that you wish to keep too. Our motto is take what you want and leave the rest!
From the first consultation to the final completion, our experts work with 100% transparency. The cash offer is the fee that we are prepared to pay while you will not be hit with random charges. Likewise, we can give you an accurate prediction of the closing timeframes by working with a local Title company. We will take the property off of your hands and replace it with cash within days.
While our transparent process and reputation within the industry should give you confidence, there’s nothing quite like seeing proof of what a cash buyer can do for you. Check out our testimonials to see why we’re California’s #1 solution.
Selling your property quickly for cash offers many advantages. However, failure to acknowledge the many we buy houses scams out there could cost you dearly. Working with a trusted and ethical solution like Premier Property Buyers ensures that you gain all the benefits without any doubt or negative repercussions.
Take the first step to selling your home in the coming days by calling our friendly experts today!
Our Promise
Premier Property Buyers is a company that purchases, rehabs, and then sells houses at a profit. Offers are made to sellers based on market value and repairs needed. Premier Property Buyers, will do everything possible to bring forth the highest possible offer to give the seller the most benefit from dealing with a fast sale. In addition, we are licensed real estate agents and can either buy your house for cash or help you sell the more traditional route. DRE Lic# 01918543.
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