Companies That Buy Houses for Cash: Scam or Legit?
Selling a house can be one of the most stressful events in your life. Not only do you have to pour time and money into getting the property ready for the market, but then you have to deal with endless showings and open houses, all while tirelessly keeping the house spotless. Even if everything goes as smoothly as possible, there is still so much time spent just waiting that it can be agonizing.
One way to make the home selling process a lot less stressful is to sell your home to one of the companies that buy houses for cash. When you go this route, you don’t have to do any repairs, deal with any showings, and you can often close in a matter of days rather than months.
All that being said, not all “we buy houses for cash” companies are created equal. In fact, some of them aren’t real companies at all and are instead scams set up to take advantage of people who want to sell their homes.
This means that you’ll want to do your research before you choose to work with a company. Taking the time to find a reputable and reliable company is absolutely worth it. Let’s take a look at what you need to know about the difference between legitimate we buy houses companies and scammers.
Companies That Buy Houses for Cash: Are They Legitimate?
There are many legitimate companies that are interested in purchasing homes for cash. These companies are reputable and will be upfront with you about how the process works and what it entails. However, there are also scammers out there who are looking to prey upon people that are trying to sell their homes.
Not all house buying scams are the same, but the thread that ties them together is that none of them actually intend to purchase your home. Instead, they are either looking to extract money from you or your sensitive personal information.
(Are you wondering how to get the most money out of your home when you’re selling it for cash? If so, check out this article.)
Who Buys Houses For Cash?
When it’s time to sell your home, your first thought is likely that you will need to hire a real estate agent and prepare your home for sale. If you do go this route, there is a chance that you will get an all-cash offer from a buyer. However, most offers you receive will be from people who want to purchase your house using a mortgage from a lender.
If you hire a real estate agent, you are signing on to give them a percentage of the sale price as their commission. There are ways to avoid paying this hefty fee, though, as well as making the whole process a lot faster and simpler. If you choose to sell your home to one of the companies that buy houses for cash, you can avoid many of the more stressful and irritating parts of the home selling process.
Who are the people that buy houses for cash, and why would they choose to do so? Some of the most common scenarios when it comes to cash offers include:
- A real estate investment company or individual investor who is interested in purchasing the property as a rental or as a fix-and-flip
- The seller approached an iBuyer
- A buyer sold their previous home and uses the cash from that transaction to purchase a new home in cash
- A buyer wants to stand out in a highly competitive market
You can find “we buy houses for cash” companies in major cities across the country. Stewardship Properties buys houses for cash in 31 states. You can learn more here about working with us and closing on your house in just a few days.
How to Spot “We Buy Houses for Cash” Scams
If you are looking for companies that buy houses for cash, you will want to do some research before selecting one. As mentioned above, there are unfortunately people out there that are looking to take advantage of others. These people will lie to you about their intentions and might even seem very friendly and trustworthy.
The Buyer Is Unavailable
Buyers might claim to be from another country and therefore unable to talk during your normal business hours. They might be worried about being traced, and they disguise this by claiming to be in a different time zone.
The Buyer Is From Another Country
There are, of course, many legitimate circumstances when someone from a different country wants to purchase a house in the U.S. However, most foreign buyers are going to want to see a home before purchasing it, or at least have their agent see it. Someone who wants to buy a home without being at all familiar with the area is a red flag, particularly if they are saying they’ll pay in cash.
Check out this article to learn more about foreign buyer scams.
The Buyer Is Too Eager
Buying a house can be very exciting. However, a buyer seems a bit overly eager to send money, there’s a chance they’re up to no good.
The Buyer Gives You Too Much Info
If a cash buyer offers financial records such as a bank statement over email before you’ve even asked for proof of funds, step back and consider if this could be a scam. When it feels like someone is giving you way too much information before you’ve even established a relationship, there’s a good chance they are trying to convince you that they’re legitimate when they actually aren’t.
The Buyer “Makes a Mistake”
When a buyer sends you more money than they were supposed to, that’s actually a major red flag. They will then tell you that you need to refund some of the money right away through a wire transfer. If you send money to them in this way, you will likely realize that the check they had sent was fraudulent.
The Investor Is Unprofessional
When you are selling a house to a company that buys houses for cash, you want to make sure you are working with professionals. After all, this is a major financial transaction. When you call the phone number of a company, they should answer in a professional way and not just sound like you’re talking to some guy on his cell phone.
Legitimate investors won’t pressure you in unprofessional ways to sign documents. If a company or individual is reputable and trustworthy, they will be happy to let you take the time you need to make the right decision for you.
The Advertising Is Sketchy
Be wary of the signs you see posted on telephone polls that say “we buy houses for cash!” These signs have been placed illegally. While it doesn’t necessarily indicate that the investors aren’t legit, it’s not a great sign that they are using these sketchy advertising techniques.
They Don’t Have Any References
If you are receiving a serious offer from a serious investor, they will be able to give you the contact information for other sellers they have worked with. When you are choosing a company, it’s a good idea to ask them for a list of properties that they have already purchased. Then, you can look up whether or not they have actually bought these homes by checking the courthouse records.
You can also check out we buy houses for cash reviews before choosing to work with a company.
They Don’t Have Any Funds
Most people buy houses using financing because real estate is expensive. When a cash buyer claims they want to buy your house, they are indicating that they have enough money in cash to actually do so.
You will want to verify that an investor or buyer has the funds before accepting an offer. When they give you their bank information, you’ll want to look the bank up online rather than calling the number on the document they give you. This is because it’s possible that the number is fake.
The Pros and Cons of Selling Your Home For Cash
There are a lot of compelling reasons to sell your house for cash. One of the most obvious benefits of going this route is that you can get an offer on your home instantaneously. Another perk is that the whole process can be a lot faster than selling your house on the traditional market because you aren’t dealing with a buyer that is getting financing from a lender.
You also won’t have to do any home staging or repairs. All of the time and energy you would normally put into cleaning, decluttering, and fixing the place up can stay right in your pocket. All of the inconvenience of dealing with home-staging, showings, and open houses can become a thing of the past.
It can also help people sell homes if they find themselves in difficult circumstances. Whether you’re having financial trouble, the property has problems, you’re undergoing a major lifestyle change, or you’re a landlord that’s sick and tired of it, this can be a reasonable route to sell your home and move on with your life.
You can learn more about the benefits of selling your house directly here.
Of course, there are two sides to every coin. There can also be some downsides to selling your house for cash, particularly depending on the company you choose to work with. For example, the purchase offers you receive could be quite low, and if you don’t stay on your toes you could end up selling your home for far too much less than it’s worth.
It’s also worth understanding that these kinds of deals can still fall through. Some companies truly do intend to purchase your property and close on it quickly. Others are actually just middlemen who go and shop around for a buyer once they have you signed on for it.
The latter group might just let the contract expire if they don’t find a buyer with funds in the time frame outlined. This means that they essentially just wasted your time while being dishonest along the way.
You can also typically expect that improvements and repairs will be deducted from your price. Cash buyers are often looking to rent out homes or fix them up and flip them. If there are major repairs necessary for the property, the perceived cost of making these repairs will likely be taken out of the offer price.
At Stewardship Properties, we don’t make our money by lowballing homeowners. Instead, we have a network of contractors that give us great deals on repair work in exchange for the high volume of work we have access to. This means that when you work with us, you won’t receive a lowball offer on your property.
Companies That Buy Houses For Cash Near Me
At Stewardship Properties, we’ve helped hundreds of homeowners sell their homes quickly for a fair price. What makes us unique is that we don’t make money by low-balling property owners. Instead, we have an exclusive network of contractors that give us heavily discounted rates because of our large volume of home repair projects.
With many “We Buy Houses for Cash” companies, the offer they make you really pales in comparison to the actual value of your home. At Stewardship Properties, we are able to make money from negotiated discounts instead. This means that you don’t end up selling your home for less than you know it is worth.
Are you interested in selling your property for cash? Do you have questions about the process or about our company? If so, contact us today!