Five Signs a Great Offer on Your Home Is a Scam
Selling your home can be a frustrating situation. First, there’s the time factor: Selling a home takes about two months on average , and can take much longer depending on the market you’re in and other factors. Second is price: The market may be hot, but nearly a third of home sellers end up lowering their asking price . If you’re expecting to make a certain amount from the sale of your home and the market simply won’t cooperate, selling your home can be a headache.
This may make you think of some bad ideas, such as selling to an iBuyer or responding to one of those unwanted “we buy houses” transactions. But even if you know better than to give in to these intrusive thoughts, you can still get scammed when selling your home, especially when someone makes an offer higher than your asking price. The market is hot ( 58% of real estate professionals say their clients have bid above asking price to beat out competitors for a home), but sometimes making a great offer on your home is a tactic to hide you from a real estate scam. it could cost you a lot of money.
Adding “Administrative Fees”
You’ve been trying to sell your home and are starting to get discouraged when you get a call from someone offering you a great price, perhaps even more than the asking price. All you have to do is pay them a small administrative fee to complete the paperwork. Selling a home comes with a hefty fee , so this may not immediately raise alarm bells, but it should—because it’s highly likely that it’s a scam designed to get you that fee and then disappear from your life. A high offer price is used to overwhelm you, but when you call to find out when you’ll receive a formal offer, you find that the “buyer” has disappeared.
They ask for a refund
It’s a little tricky: You get an offer higher than your asking price, but it comes with a lot of contingencies, including your home appraising for more than the offer. The buyer receives a loan for the full amount of the home’s appraised value, pays for the house, and asks you to pay back the difference between the appraisal and the sales price, or may even offer to split that extra money with you as an incentive. .
For example, you receive an offer to buy a house for $300,000 based on an appraisal of $350,000. Assuming you can get that appraisal, the buyer gets a $350,000 loan and officially buys the house at that price, but asks you to pay him back $50,000 (sometimes minus closing costs). This is a scam , plain and simple, because the loan is based on the sale price of the home. Home sellers may not see the problem because they are getting their money, but if you sign up for a fraudulent loan, you could end up with a ton of problems down the line.
Using a cash receipt
One of the most obvious signs that you are being defrauded in a variety of financial transactions is the presence of a cash receipt . While these checks have their uses, they are also often used in scams due to the delay between them being deposited into your bank account and the funds being verified and cleared – funds in cashier’s checks must be available within 24 hours , so the deposit appears as if it has cleared and entered to your account. But the check itself can take several days or more to pass through the system.
The cashier’s check home buying scam works like all other cashier’s check scams: you are contacted by an interested party who loves your home so much that they want to pay more than they’re asking for it and wants to block the deal. by sending you a cashier’s check with the deposit. You receive a (fake) check with an amount written on it that is higher than what you agreed to: if they promised you a $10,000 advance, they will send you $15,000. The buyer claims that it was an accident and simply asks for a refund of the excess funds. When their bad check bounces, the bank will remove that $15,000 from your account and you will never see the $5,000 refund again.
Giving you too much information
A key sign that the offer on your home is a scam designed to scam you out of money is the flow of contacts and information . Scammers will often send you stacks of financial statements, letters from their bank, and other financial information to prove to you that they have the money to buy your home—often information you wouldn’t think to ask for in the first place. and information that comes directly from them and not from a bank or real estate professional. They combine this with a barrage of text messages, phone calls and emails emphasizing the urgency of the sale.
All of this is designed to achieve two goals: prevent you from doing real due diligence since they have already given you all the information you need, and force you to simply continue with the shady deal.
Unusual charges
When selling a home, the buyer and seller traditionally pay for various services and fees. If a potential buyer who gave you an over-asked offer asks you to pay for something out of the ordinary, be suspicious.
For example, a buyer traditionally pays to have a home inspected if they want one. If the buyer insists that you pay for the inspector (whom he hired), be careful: after paying the inspector’s fee, both the buyer and the inspector may be out the window. If a seller wants to buy your home for more than you’re asking, insisting that you cover such small fees should be a red flag. Scammers rely on the sunk cost fallacy to keep you hooked because you don’t want to lose the offer, so you’re more likely than usual to ignore your instincts.