Selling your home can be scary. As one of your most significant financial assets, the value of your house is a vital part of your financial plan. When it comes time to sell, you want to protect your investment and get top dollar.
And if that wasn’t stressful enough, everywhere we turn these days, someone is trying to scam us for our hard-earned money. It can be hard to feel confident selling your home, especially if you don’t sell through a traditional real estate agent.
You’ve likely seen the signs on the side of the road promising to buy homes for cash. Of course, this feels like a scam because how does some guy who handwrites signs with a Sharpie have the cash to buy your home? But if you find yourself in a situation where you need to sell fast or don’t have the money to prepare your home to sell, legitimate residential real estate investment companies will buy your house for cash, minus the scam.
A real estate investor can open doors for you to sell your home and walk away with money in your pocket. If you are open to exploring non-traditional methods of selling your home, you just need to find the right investor. You want an investor who looks out for you, has cash in hand, and can wrap up the deal on your timeline.
What To Look For In A Real Estate Investor
So, how do you know who to trust? For your largest financial decision this year, choosing someone you trust to handle the transaction can be overwhelming. Here are the steps you must take to ensure that your home (and your financial future) are in good hands:
Ask For Proof
An investor who is legitimately looking to purchase your home needs to give you evidence that they are capable of following through with their offer. Ask them for a copy of a recent bank statement or proof of funds to guarantee they have the money to purchase your home.
Do Some Research
The first and best place you should turn is the Better Business Bureau (BBB). By visiting the BBB, you can review a company’s rating, read any customer complaints, and see any current alerts for the business. An investment company with a good BBB rating is one you can confidently work with.
Expect An Earnest Money Deposit
Your investor should put down a large sum of earnest money to guarantee the transaction. This should not be an issue for a cash buyer, and any home seller should expect this as a part of the sale. You can safely ask for 10% of the purchase price and make it nonrefundable if they pull out of the sale. If a company cannot do this, you should look for a different company.
Eliminate The Inspection Period
A real estate investor knows your home needs work and is willing to take on the risk involved with the purchase. After a general assessment of your home, they will make an offer that factors in the work, time, and money they must put into it. A genuine investor will not need an inspection period, as some may use it as a loophole to get out of the transaction.
Avoid “And/Or Assigns” Contracts
If your sale documents list the company with the caveat “and/or assigns” next to their name, this indicates that they intend to wholesale your home. Companies will come to you with an offer they don’t have the money for and then try to wholesale your home to their investor network. If they can’t find a buyer with the cash to cover the sale, it could be the end of your home sale; Cue the inspection period clause they made you agree to, which they will use to get out of your deal. This is a red flag and makes the reliability of your transaction highly questionable.
Ignore E-Mail Or Sight-Unseen Offers
A reputable investor is going to do their due diligence. They will want to see your property before making a cash offer. A sight-unseen offer should concern anyone selling their home. This is another tactic used by a wholesaler without cash who intends to offload the property to other investors.
3 Signs Of A Scam
Finding a quality company to work with is the key to an excellent real estate transaction. While trying to connect with an investor you can trust, these red flags indicate you should continue your search for your home buyer:
1. An Unrealistic Offer Price
When you sell to an investor, they are buying your home as-is. Their offer price will reflect that. If an investor comes in with a full-price offer or anything above 90% of the current market value for your home, this should serve as a warning that something is fishy. An investor is in the deal to make money, so they won’t make you an offer that doesn’t leave them room to earn a profit for the work they will put into your home.
2. An Early Payment
If your investor “accidentally” cuts you a check before your close date, warning bells should go off. This is a scam used by shady con artists. The check is usually no good and is a tactic to pressure you into sending them money before you never hear from them again.
3. Unwarranted Fees
You may negotiate some fees throughout the sale process, which is a normal part of a real estate transaction. But your fees typically come from the final payment once the transaction is complete. An illegitimate company may use “fees” to scam you out of money on a transaction they never intend to see through.
While selling your home can feel like a big chore, it doesn’t have to be. You can safely and confidently sell your house to one of the investment companies that buy houses. They offer a very needed and valuable service to many who simply cannot spend time or money preparing their home for sale. Find a real estate investment team that can offer personal referrals from satisfied clients and is established and respected in your area. They will give you complete confidence in the sale of your home.
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