When you are ready to sell your house in Memphis, you might assume that the only way to do so is to hire a real estate agent who will list your house on the open market and sell it to a buyer. However, you might be surprised to know that’s not the only way to sell a house. A real estate investor, or cash buyer, is a person or company that buys real estate for cash. Their intention is to flip it and create revenue from the sale afterward.
Doing so is a perfectly legitimate way of purchasing real estate. However, there is a real lack of knowledge that exists around real estate investors which allows scammers to thrive. They’re able to leverage the hard work and experience of reputable cash buyers into conning hard-working people out of their money and houses.
Selling your house as-is to a cash buyer can be a great way to sell if you find yourself in a situation where you need to move to or from Memphis quickly, such as with relocation or divorce. It can also come in very handy if you are dealing with a problem situation such as mold damage, water damage, termites, unruly tenants, or hoarders. And if the house comes with financial issues, such as foreclosure or tax liens, a direct buyer is capable of purchasing the house and removing those problems from your concern.
All of that said it’s important to be aware of what that direct buying process should look like in order to identify the scammers who want to use the situation against you. Here’s how to avoid “We Buy Houses” scams in Memphis.
Tips to Avoid “Cash For Houses” Scams
Can You Prove Their Company Exists?
Let’s say that you get a phone call from a person claiming to be a real estate investor. They say they want to buy your house in its current condition for cash and they want to close the deal as soon as possible. How do you know that person or their company is legit? You might ask yourself the same question when you see a “We Buy Houses” sign on the highway and are considering giving them a call. How can you be sure you’re dealing with a reputable investor and not a scammer?
The answer is, simply, to do a little research. Start by asking them easy questions. What is the name of the company? What is their actual address in or around Memphis? Would it be possible for you to come by for an appointment? Who is the owner of the company? Is there a website you can look at to learn more?
With every answer or non-answer that you get, it provides you with an opportunity to follow up and confirm the truth. Don’t be afraid to push for more information if you don’t get what you needed. A reputable company is more than happy to provide you with the details you need to feel safe and secure. And the more information you can verify, the more likely it is that they are a legitimate business. Plus, if they won’t give you answers to these simple questions, it stands to reason that there’s an important reason they’re withholding information.
If you don’t feel comfortable asking them directly, just head to the internet and run a Google search on them. You’ll probably either find their information or you won’t, and that will tell you a lot. Also, a good resource to check is the Better Business Bureau. You can call them at 202-393-8000 or look up the investor on the BBB website. If the company is listed and has an A rating, then that’s a good sign. If the company is not listed, that could be a red flag.
Is the Investor A Little Too Eager to Buy Your House?
A reputable real estate investor needs information in order to make you a fair cash offer. They are going to want to understand the situation, possibly take a tour or see photos of the property, and collect as much data as needed in order to make a sound business decision. This is an investment for them so they’re not going to want to offer money for something they don’t understand. It’s very unlikely that a legitimate real estate investor will make you an offer and ask to close the deal without even learning anything about your Memphis house. That’s especially true if it’s an older house or one that is clearly in a state of disrepair.
If this person or company is trying to get you to sign something immediately before you’ve had a chance to think about it, there’s probably a good reason to be concerned. A reputable cash buyer will want to make sure you feel comfortable about a decision before you commit to it. Someone who is trying to get you to agree while you still have questions or concerns may be trying to dupe you before you realized it’s too late.
Do They Keep You Waiting?
A legitimate real estate investor might offer you a deposit as a sign of good faith. Since the investor is very likely to purchase your house, they may want to ensure that there is some kind of agreement in place between you and them as they work out the details. It’s a sign of good faith on both sides, just like with any real estate transaction. Another way of doing this is if an investor provides you some proof of funds, which can ensure you that they have the money to buy your house as they’ve suggested. It’s all about creating trust between the buyer and seller so that the transaction feels mutually beneficial.
A scammer, however, may try to string you along without providing you with any documentation to back up their financial claims. While it is true that any investor may need some extra time to secure funding, anyone who isn’t being 100 percent upfront with you about their financial situation may have something to hide. You don’t want to be strung along for a long time, missing out on better opportunities, only to find out there’s no deal because they couldn’t sort out their situation.
Do You Understand How the Transaction Should Work?
Perhaps the best way to spot a “We Buy Houses” scam is if you personally understand how a cash buyer transaction is supposed to work.
One of the most important details is that the money in the transaction should always flow in the direction of the seller and never away from the seller. So if any real estate buyer ever asks you to give them money, perhaps in the form of an administration fee or processing fee, that is a massive red flag. Not only should you not do the deal but you may want to alert the BBB about it. Even if this investor is asking for a small amount of money, such as $100 or $200, that is still completely unnecessary. There is no reason to risk losing even one dollar over a scam like this.
A legitimate real estate investor like Fair Cash Deal will want to review the details of your house and the full transaction. It’s likely that they’ll want to either get more information or take a tour of the property. They’ll probably want to talk or meet with you to discuss the details as well. You should be given the option to decide where and when you’d like that meeting to take place. After that, they will make you an offer in writing and you should be under no financial obligation to the investor if you decide to say no.
If you accept their offer for your Memphis house, you can negotiate with them over any closing costs. They may end up covering them for you and you’ll end up avoiding many of the fees usually associated with selling your house, including appraisals and inspections. Finally, the investor will pay you the agreed-upon amount in cash (or however you decide you would like the money) and close the sale on your terms. They can close in a matter of days if you prefer. After that, you’ll have cash in your pocket and be able to start fresh with the next phase of life.