In this 5-part video series, Express Homebuyers’ CEO Brad Chandler discusses the "We Buy Houses" scams out there and how to protect yourself from nasty house buying scams.
Another common practice in the home buying industry is the age-old bait and switch. Now the bait and switch can be used in two distinct ways.
The first is on the offer price. There is a ”we buy houses” company operating in the DC metro area that is famous for the bait and switch on offer price. They tell you over the phone they can purchase your home for, let’s say, $150,000 in cash and can close in 2 weeks. You’re happy with that offer and sign a contract without first going through the checklist I’m going to share with you in a minute. You’re selling in 2 weeks because you’re in a real financial mess and need the money urgently. The investor then tells you he has to inspect the property before he signs his part of the contract.
He shows up a few days later and reports that because of certain repairs he must now lower the price to $140,000. You’re upset but because you’re in jam, you agree. Then the day before settlement, the investor calls and gives you one of a thousand different reasons about why he can’t pay you $140,000. Now he can only pay you $120,000. You are furious, but also 2 days away from a foreclosure auction and the possibility of losing everything, so you agree.
This exact scenario played out six months ago with a seller to whom we had made an offer. She told us that another investor was going to pay her $50,000 more than we had offered. When we checked back months later, we found out she sold to that same bait and switch investor for $3,000 LESS than what we had offered. So essentially she got $53,000 less than the investor originally promised her.
That’s the first bait and switch tactic.