Selling your home is a stressful process as is, even without all the unpredictable complications that might come up. To keep the stress to a minimum, the best thing to do is to mentally prepare yourself as much as possible. One of the important things you should research and learn about is the common real estate scams you need to watch out for.
Namely, there are a few different ways things can go south if you’re not careful. If you’re a real estate newbie, you probably aren’t aware of the various fraudulent tactics. So, we want to help you protect yourself from the most damaging real estate scams and make sure the home selling process goes smoothly.
If you’re a home seller and want to avoid potential scams and the headache that comes as a result, keep reading and learn about scams you should look out for.
‘’We Buy Houses Scams’’
An example of common real estate fraud is the so-called we buy houses scams. These are some of the most damaging scams out there are there are different types of we buy houses scams you should be aware of.
Types of We Buy Houses Scams
- Have you ever heard of real estate wholesalers? Generally speaking, this means that an individual buys homes at discount prices and resells them to investors for a profit. Even though wholesale isn’t necessarily illegal, there are wholesalers who use various tactics to trick the seller and get a lower price.
- If you’ve ever received an email with a cash offer for your home, it’s a scam. These are phishing emails that are looking to get hold of your personal information and steal your money. There’s no real buyer behind them.
- Is the buyer requesting that you give them a deposit for fees upfront? Don’t trust it. You shouldn’t be paying for anything until closing day.
- Scam artists often prey on sellers who are in a bad financial situation. If you’re approached by an investor promising to buy your home and sell it back to you later, you need to be extremely careful. Once the title is in their name, they can take out all the equity from the house and leave you in an even worse position.
So, what exactly should you look out for, and how can you spot these common real estate scams? Here are a few things you should bear in mind.
Watch Out for Fake Websites and Reviews
Always research the company that wants to buy your house. What does their website look like – does it seem fake? Don’t stop at their website, do a thorough Google search, and look for reviews and people’s experiences with the company.
Beware of the fact that fraudulent companies often hide customer reviews or have fake reviews. If the testimonials are generic, all mention the same things, and they are overly positive – they’re probably fake. So, read carefully if you want to avoid this real estate scam. Only make deals with reputable companies you can fully trust.
How Is the Buyer Behaving?
If the buyer is showing any strange behavior, keep your eyes wide open. It could very well be a red flag. For example, if they are itching to close the deal and they keep rushing you, it could mean that they are trying to trick you.
A legitimate buyer needs time to handle the paperwork, inspect the house and come up with a fair offer. So, if they are trying to skip some of the steps, it’s not a good sign. If any of their behavior is suspicious, we advise you to request proof of funds and make sure you don’t fall victim to real estate fraud. If the buyer is truthful and legit, they won’t have an issue providing you with this information.
Receive Money First, Sign Over the Deed Second
Is the company trying to convince you to sign over the deed before they pay you? Run!
This is a huge red flag that you need to be wary of. To avoid getting scammed and losing your home without getting paid, wait until you get the money. Then you can sign over the deed. The last thing you want is to sign over your home and never get the money you were promised. Be careful who you sell to.
Home Inspection Scams
An important step in the home selling process is home inspection. After all, you need to know the condition of your home before you put it on the market. Of course, you can do a DIY inspection, but we advise against it.
The best thing to do is hire a professional inspector who will thoroughly inspect your home and inform you about any potential issues. Once the inspection is finished, you will get a report with all the information.
A home inspection scam is when an unqualified inspector deliberately misses or hides problems with the home. In other words, the scammer intends to make money by taking advantage of the seller’s ignorance. Unfortunately, this type of scam is not that uncommon, and it can be really hard to spot.
That is why we advise you to be extra careful when choosing an inspector and to do your research before you hire anyone.
Types of Home Inspection Scams
There are a few different tactics when it comes to home inspection scams.
- The realtor and the inspector have a deal – the inspector deliberately hides issues with the house, so the sale goes through, and the realtor gets their commission.
- The inspector is unqualified. They might not be trying to scam you deliberately, but they are doing a lousy job because they don’t have the proper knowledge.
- There are hidden costs. The inspector may have told you their rate when you hired them, but once they do the inspection, they are suddenly charging you additional fees.
These are just some of the home inspection scams you should be aware of. To avoid these and any other scams of this kind, be sure to do a background check on the inspector and be careful. Do your research and only work with qualified inspectors and reputable companies.
Fraudulent Real Estate Agents Stealing Your Money
When selling your home, you might cross paths with scam artists posing as real estate agents. They aren’t actually a licensed realtor – they are just trying to get your money.
What this real estate scam entails is a (fake) realtor or loan officer approaching you with an appealing offer. They convince the property owner that they have a great buyer for the property in question. Then they request the seller’s personal information, e.g., bank account information, in order to wire money from the made-up buyer. Red flag – wire fraud!
Once they obtain the information they need, they use it to empty the seller’s bank account. As a result, you’re left without money and without a buyer for your home.
If you’re approached by a so-called real estate agent, don’t make any deals with them until you make sure they are licensed and legit.
How to Protect Yourself from Scams When Selling Your Home?
There are a few things you can do to protect yourself from real estate scammers when selling your home:
- Do your research
- Hire a qualified inspector
- Verify the identity of the buyer
- Wait to get paid before signing over the deed
- Avoid fake realtors. Make sure you’re hiring licensed real estate agents
- Be aware of common scams and red flags
- Report any suspicious behavior
By following these tips, you can protect yourself from damaging real estate scams and ensure a smooth home selling process. The important thing is that you are making well-informed decisions and carefully researching all the parties involved in this process.