You might be nervous about getting a fair offer for your home if you sell it quickly or as-is to an iBuyer. Although iBuying is becoming a more common way to sell houses, it’s also fairly new and often misunderstood.
There are unfortunately many scams associated with buying houses quickly for cash. However there are clear ways to spot iBuyer tricks to ensure you are working with a reputable iBuyer.
We’ll explore the tricks to watch for and how to avoid them so you can see if iBuying is a viable option for selling your home.
5 Tricks an iBuyer Might Try to Pull
1. Exploit a Seller’s Situation
Some buyers don’t have your best interest in mind and instead try to take advantage of people in positions of hardship, desperation, or even a time crunch.
You could be a target for this trick if your house needs major repairs or if you need to sell your house quickly. If you receive unprompted offers to purchase your home, or you’re contacted by someone posing as a government service offering foreclosure relief, don’t move forward with that buyer, as they’re likely an opportunity investor.
Even in a situation where you might feel desperate, recognize your power and responsibility before relying on something that sounds too good to be true. If you can’t make your mortgage payments, work directly with your lender, not an outside service. If you need to sell your home quickly, research to find a reputable iBuyer instead of relying on an entity that pushes its services on people. These tricks take advantage of sellers, for example by making low offers or taking over deeds while leaving sellers with mortgage payments.
2. Make Communication Difficult
If a buyer doesn’t provide one clear contact person, if they don’t have a website, you lose touch with them, or you receive suspicious emails or phone calls from them, these are red flags.
When a legitimate iBuyer offers to purchase a home, they should also be able to outline the sales process and timeline, involving clear back and forth communications with you.
You should always be able to reach them when needed, rather than only being in touch when they contact you. A buyer won’t request personal information that you’re uncomfortable sharing. If you’re ever unclear about their requests, you can ask for clarification.
Do your research on the buyer to make sure they haven’t been involved in scams, that they have a reputable business, and a clear website that gives you access to a direct point of contact. Otherwise a bad buyer could disappear, leaving you to start over with the sale of your home and with potentially wasted money on prior services to prepare your house to sell.
3. Give False Terms and Fees
Scammers will offer no-fee and no-commission transactions, but suspicions rise when they don’t make it clear what they get out of the deal. Often they’re hiding fees or are using this to lure sellers in to a fraudulent sale.
Another trick might be to charge a fee upfront. With real estate transactions, no fees or commissions are paid to the buyer until the sale closes. By requesting a fee or commission be paid upfront, the buyer might receive your money and then disappear, forcing you to start over with the sale and with money wasted on a scam. A scammer might even offer to pay you before the sale closes, but this is a red flag because it doesn’t fit the required process to sell a house.
The best way to ensure you’re working with a legitimate iBuyer is to read your agreement carefully and ask for clarification on any timelines or fees you don’t understand. The agreement should not change throughout the process of the sale. If it needs to for any reason, make sure you reread it again carefully before signing. Pay close attention to clauses about the buyer being able to back out of the sale before and after closing.
4. Make a Low Offer on Your Home
Some cash buyers will ask for your mortgage payoff amount and then only pay you that amount for your home, instead of its fair market value. They take advantage of people who need to sell their houses quickly or as-is. This is not the only way to sell a house quickly. Reputable iBuyers assess the fair market value of your house. The offer might be slightly lower than the fair market value but this should be clearly explained as it is often lowered to cover risks and costs for which the iBuyer becomes responsible.
If you’re concerned about an offer being legitimate, you can request that the buyer provides proof of the funds they’ll use to purchase the house. This prevents you from closing on the sale with a buyer that doesn’t have the money to back up their offer.
5. Offer to Buy a Home Without Viewing It
Even home investors won’t purchase a home without having someone view it to assess its value. A buyer willing to purchase a home sight unseen is not interested in a legitimate real estate transaction and should be avoided.
Legitimate iBuyers will send their own inspector to assess the condition and value of the home, which often leads to them adjusting their initial offer, a point they would’ve made clear from the beginning.
Sell to an iBuyer Without Any Tricks
Avoiding these 5 tricks can help you find a reputable iBuyer for the sale of your home, so you can enjoy the benefits of this growing real estate trend.
As with any house sale, do your research and pay attention to the details. The effort will pay off, especially if you find you can sell your house quickly, for cash to a trusted iBuyer.
Recommended Reading
- https://www.forbes.com/sites/alyyale/2019/05/07/buying-or-selling-a-house-heres-how-to-avoid-fraud-scams/#113b191e10a7
- https://www.inman.com/2015/07/09/5-ways-to-tell-your-cash-buyer-might-be-a-phony/
- https://www.bobvila.com/slideshow/buyer-beware-9-real-estate-scams-to-watch-out-for-50456#accidentally-buying-a-foreclosure