Be cautious of companies that claim to buy houses for cash. The popularity of cash for homes is rising and more and more people are selling their house to companies buying homes fast and for cash. However, so too are the unethical practices. They look credible. They are convincing. They disguise themselves representing a company name, but they are not real; anyone can be their victim.
Below, we discuss We Buy Houses unethical practices and other behavior and how to protect yourself from scams.
We Buy Houses – Unethical Behavior and Practices
1. Trying to persuade you to transfer the deed of sale to them while the mortgage remains in your name.
2. They ask for small upfront fees. Companies that purchase houses for cash don’t ask for any fees aside from the offer the give you.
3. They tell you that they will send some other people to check your house. These people could be the real buyers, and the agent you thought were the buyer are trying to sell your house wholesale so they can get a commission.
Protect Yourself from We Buy Houses Scams
The best thing that you can do to protect yourself from these We Buy Houses scams is to do research. The internet is giving us 24 hour a day information, so browse and research when you have the chance. Here are the things that you can do to protect yourself from these scams:
1. Check the Reputability – BBB and Secretary of State
Check the reputability and credibility of the companies that purchase houses for cash. Are they with the Better Business Bureau? Do these companies have past issues and complaints? How are their customer reviews? Are they in good standing with the Minnesota Secretary of State? You can look them up at MN Secretary of State website here: https://mblsportal.sos.state.mn.us/Business/Search
and you can search them at Better Business Bureau here: https://www.bbb.org/en/us
2. Look at Their Website
Does their website promote their company name? Does the website show who the people are behind the business? If they don’t show who the owners are, ask yourself why that would be? Most local small businesses want to promote their brand and relationships in the community. Businesses should promote their brand or company name as much as they can, and whenever they get the chance to, especially in their own platforms such as their business websites. If they don’t promote their company name or their own identity on their own website, then there must be something not right about these companies that purchase houses for cash.
3. Research the Owner
If you can find the name of the owners, search for them in Google and check what and who they are affiliated with, or if there are some issues or complaints that are associated with their name. This is one way to ensure that you don’t sell your house to scammers.
4. Ask Questions, Ask about the terms
A true cash purchase, should not have any contingencies in the contract. It should not be contingent on inspection, appraisal, approval by investors, etc. Also, you should get a down payment or earnest money to secure any agreement. In Minnesota, a purchase agreement is not valid unless earnest money has been exchanged. This is usually held at a title company. Make sure the contract states that it is “NOT ASSIGNABLE”. Contracts in Minnesota can be sold and assigned to another buyer unless you write this on the contract. Your terms and agreements must be clear to both parties. If there are ideas that seem to be vague for you, ask the buyer or the agent to clarify everything. Don’t assume. Ask a question and be aware of what you have learned.
5. Read the Contract
There are some sellers who get pressured to read the contract. They may seem too meticulous about it, which may seem to discourage the buyers.
Normally, you really have to be meticulous about reading the contract because you are selling a real estate property; one that has great value.
Before selling your property fast to companies that purchase houses for cash, read the contract so that you won’t miss any agreements that you have made with the buyer.
Sell to Reputable Companies that Buy Houses for Cash
By thorough research, you will see who the companies are that conduct ethical buying practices. Look for them, ask for the right pricing, and sell your house quickly and for cash.