"We Buy Homes for Cash"— Real or a Scam?
You’ve probably seen these signs around town (or maybe you’ve gotten a phone call or postcard) claiming that a cash buyer is ready to buy your home fast, for cash, as-is. Is this legitimate?
You might be thinking about selling your home to one of these buyers. If you are, I want to make sure you have all the important information so you make the right decision for you and your family.
Are These Cash Buyers Legitimate & What's The Catch?
In a nutshell, most cash buyers are legitimate. Watch the video below to learn more.
- Less money in your pocket. In almost all scenarios, you will make more money listing your home with a real estate agent (even after all fees are accounted for). I break this down in a little more detail below. A cash buyer is only going to give you at most 70% of what your home is worth (but probably less).
- Getting cheated. If a cash buyer asks you for any money up-front or at any point in the transaction, run the other way. You should not have to pay for anything.
- Not really getting "rid" of your home. Read the fine print of any offer you sign. Some cash buyers can walk away at the last minute and you are back to square one.
Yikes. These sounds pretty bad. However, you can avoid getting scammed by doing your homework. There are many reputable companies that buy homes in Omaha and if you scroll down to the bottom of this page, I provide a "Cash Buyer Checklist" to make sure you are asking the right questions
- Avoiding repair costs. Selling off-market to a cash buyer means that you sell your property as-is without repairs.
- Speed. Cash buyers can typically close in as little as 7 days. If you need to get rid of a property ASAP. This is a huge advantage.
- Flexibility. Cash buyers will negotiate with you on terms. So if you want to move out and leave belongings you don’t want anymore, some cash buyers will agree to this (but it may lower your offer).
Who are these cash buyers?
Generally, there are three types of cash buyers.
- Investors - These buyers are looking for properties they can buy, but some work into (or no work), and then rent it to a tenant.
- Flippers - They are looking for properties in rough shape. Their goal is to buy at a low price, put money into the property, and sell for a profit.
- Wholesalers - This group makes up the majority of cash buying companies you see out there. They are the middle-man. They are looking to get homes under contract at a low price and then turnaround and sell it to an investor at a higher price. Oftentimes, a wholesaler will get a home under contract and will have a third party actually close on the property. There are risks associated with this type of buyer that I explain in the video below.
How much do these "cash" buyers pay?
How to sell your home for the most money to a cash buyer?
If you want to sell to a cash buyer, there are a few very simple tips in the video below that you can use to get the most money possible for your home.
Ways To Spot a Scam
- It's too good to be true. An offer price that's very high will most likely fall when it's time to close, especially when there are many repairs to be made.
- They ask you to transfer the deed into their name. Just because you transfer the deed, it doesn't mean that you're no longer responsible for the home. The mortgage will still be in your name, which means you still need to pay off the loan..
- You’re dealing with wholesalers. These buyers will get your house under contract with no intent on actually closing the deal. If a wholesaler can't find someone to assign the contract to, they may just cancel it. This is a big waste of time.
- The seller doesn't show proof of funds. If you're being offered cash, you have a right to ask for proof of funds like a bank statement.
- They ask for money upfront. The Federal Trade Commission specifically prohibits through MARS, the Mortgage Assistance Relief Services rule, that companies can't take any fees until you have received and accepted an offer.
- Their reputation is hazy. When you do your homework, you find dubious information or non-favorable reports. Such as:
- They aren't registered with the BBB.
- Their website is vague, without a real company name or association.
- Googling the owner brings up shady reports.