Worried about a house buyer scam and who you can trust? We understand selling your home is a big decision and not all house buyers operate with integrity. We’ve seen scammers take advantage of homeowners, leading to financial loss, inconvenience, and stress. If you’re considering selling your house for cash to a homebuyer, we find it’s important to look out for red flags to protect yourself.
1. “And/or Assign” on a Contract
A real estate contract typically has your name as the seller and the buyer’s name as the buyer. Watch out for the words “and/or assigns” after the buyer’s name. These words mean this person may not intend to buy your house and is actually assigning it to someone else. These “ASSIGNORS” act as the middleman. They will be looking to assign your contract to a real buyer and make a profit in the process.
How to Avoid This House Buyer Scam:
- Clarify Intentions: Ask the buyer directly if they plan to assign the contract. Assigning a contract is legitimate but should be done ethically and transparently.
- Verify Credentials: Ensure the buyer is reputable and experienced. Check references, online reviews, and past transactions.
2. No Proof of Funds
A Proof of Funds document is verification that a person has money in the bank to purchase your house. Someone who is only intending to ASSIGN your contract does not have the money to actually buy your house. Some may even flash you a fake letter that looks legitimate! A real buyer should be able to show a proof of funds document from a local, reputable financial institution.
How to Avoid This House Buyer Scam:
- Request Proof of Funds: Ensure the buyer provides a legitimate proof of funds document from a local reputable financial institution.
- Verify the Document: Contact the financial institution to verify the proof of funds.
3. Lowers the Price After Contract
Beware of a buyer offering a price too good to be true. ASSIGNORS will tell you whatever price you want just to get you under contract. This prevents you from selling your house to anyone else. Later, they will try to negotiate a lower amount with you just as you’re ready to move. You don’t have to settle – you have options.
How to Avoid This House Buyer Scam:
- Set Clear Terms: Ensure the agreed price is clearly stated in the contract.
- Hold Your Ground: Don’t feel pressured to lower the price after the contract is signed.
4. No Earnest Money Deposit
It is standard real estate practice for a buyer to put down $1,000-$5,000 earnest money deposit to show they are serious about buying your house. Beware of a buyer who says this deposit is not required because it’s a fast deal or low purchase price. This is a red flag that they may be an ASSIGNOR that does not have the money to purchase your house and may not follow through on the contract.
How to Avoid This House Buyer Scam:
- Request an Earnest Money Deposit: Ensure the buyer provides a reasonable earnest money deposit.
- Verify the Deposit: Confirm that the deposit is made to a reputable escrow account.
5. Multiple Walk-Throughs
A true homebuyer will only need to walk your property one time to gather all the information they need. Watch out for many people trudging through your home – often introduced as inspectors or contractors. This is a red flag that your “buyer” does not have the money to actually buy your home and is showing your home to other buyers to ASSIGN your contract.
How to Avoid This House Buyer Scam:
- Limit Walk-Throughs: Agree to a single walk-through and be wary of repeated visits.
- Clarify the Purpose: Ask why multiple inspections are necessary and who will be attending.
6. Pushes Out Closing Date
If a buyer keeps pushing out the closing date you agreed to, this may be a sign that they need more time to assign your contract and find a buyer. An ASSIGNOR will agree to whatever closing date you want, but they cannot close until they find a buyer. This tactic is unfair because they promised you this date, and you are depending on it to move.
How to Avoid This House Buyer Scam:
- Set a Firm Closing Date: Establish a clear closing date in the contract.
- Enforce the Agreement: Hold the buyer accountable to the agreed timeline.
Finding a Trustworthy Local Homebuyer
If you’re considering selling your house for cash to a homebuyer, it’s important to look out for these red flags. If you live in the Kansas City metro area and have questions about how to ensure a safe and secure home sale, reach out to us at Best Offer KC. We are a family-owned, local homebuyer located in Blue Springs, MO, and have been able to help over 2,000 families in Kansas City for more than 20 years. We’d love to help make the process of selling your home safe, secure and stress-free. Please call or text us at 816-844-6224 Send Text or fill out this form to get started.