Unsolicited Offer to Buy Your Home: Scam or Opportunity?

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“I want to give you some easy money.” “A cash offer on your property… if that interests you, please read on.”

Most homeowners are familiar with these solicitations, which come in writing or letters from people or companies who want to buy your home, even if it’s not for sale.

Stacey Wood, a psychologist and professor at Scripps College in California, sees a lot of them when she researches cases of elder abuse and exploitation. “I was dealing with clients and I could see a stack of letters. There will be phone calls interrupting our meetings from investors trying to sell their homes.

For many homeowners, these calls are a constant rejection of requests to buy a home they are not interested in selling. But if you’re really interested in selling, are they a possibility? That may be the case, but experts say you should take steps to protect yourself if you decide to sell. And you might get a better deal by going the old-fashioned way and putting the house on the market.

“If you want to sell your home and you think selling it will make a profit for you, it’s much better to contact a reputable salesperson, real estate agent, and market your home through these channels,” says Brian Adamson, associate dean, law professor at Case Western Reserve University.

Why am I getting these phone calls and letters about my home?

Most of these unexpected requests come from real estate investors looking for properties to fix up and flip or buy and rent, says New Jersey real estate investor Amit Darjee. Those investors often come with a different idea for that property, for example, the investor thinks the homeowner might be interested in selling because the property needs major work to list on the market.

“Real estate investors are in the business to make a profit, all for homeowners who are struggling or looking for a solution to a financial problem,” Darji says.

With cash on hand and no bidding wars, the sale can close quickly, with the investor often paying closing costs. “You can create a win-win situation for both parties,” says Darjee, who needs a good, responsible investor and homeowner.

Pro tip

If you decide to sell your home off-market to an investor or potential buyer, make sure you know what your home is worth and retain professional help, such as a realtor or attorney, to protect you through the transaction.

Is this guy trying to buy my house a scammer?

Not every opportunity that comes through the phone or mailbox is a “winner,” and some can be boring. There are a few known scams to watch out for.

Known as a foreclosure rescue or “white knight” scam, a prospective buyer gives a homeowner a loan to help them make payments and avoid foreclosure, Adamson says. In exchange, the prospective buyer signs the homeowner on the deed, which is temporary, he said.

“When the homeowner comes back and tries to pay the white knight, the white knight is either gone or the white knight has sold the home and can even go into eviction proceedings against the previous homeowner,” Adamson says.

In one case, she said, Wood convinced someone to get a home equity loan to fix up the property before the sale. “The key to off-marketing is not to do the repair work before you sell.”

In other cases, investors looking for a deal on a below-market property target homeowners who don’t know exactly what their home is worth, Wood says. That could be seniors who bought their homes decades ago and are unaware of the increase in home prices in recent years. Someone who is unfamiliar with comparable home sales in their area may think that an offer is a good fraction of what they would get if they put their home on the market.

Most of these requests come from investors, says Wood, “not the letter: ‘Please sell your house to my family,'” she says. You may be getting contacts from potential buyers, but be wary of anyone who wants to buy your home while it’s not on the market.

How can I make calls?

Unfortunately, experts say, it is not easy to stop petitions that can come from many different buyers at once. Mainly, be clear that you don’t want them to call you back.

“Keep that text message, keep that voicemail, but if you want them to stop, if they’re calling or texting, make sure you say firmly and clearly, ‘I’m not interested, don’t contact me or call me again,'” says Adamson.

If you keep calling, you might want to try contacting the Better Business Bureau or government agencies, such as your city or the Federal Trade Commission, Adamson says. He says there are federal and often state regulations that prohibit misrepresentations in business inquiries. Those rules usually come into play only after a business deal is in place. “When things go south and maybe a deal or deal is done and they’re trying to reverse the deal. You never want to get there,” he says.

What if I want to sell my house?

If you’re thinking of selling your home, consider taking the most common route: finding a real estate agent, listing for sale, and considering the bids you’ll receive. If a texting investor wants to, they can compete with other people who are interested and can offer more money. A real estate agent charges a fee, usually around 6% of the sale price, but you may get more than 6% off the open market. “I have nothing against real estate investors, but you can always buy your home on the MLS,” says Wood.

If you choose to sell off-market instead, there are steps you can take to protect yourself if you’re dealing with an investor or someone who has access to financing.

Get help from a pro

Darji said he encourages homeowners to get an attorney to help them through the process. That will cost some money, maybe $1,000 to $2,500, but it can still be a savings of more than 6% of what real estate would cost. “We want to act and operate in a way that protects homeowners,” he says.

Retaining a professional, such as a representative or attorney, is key to protecting yourself, Adamson said. “Transactions, real estate transactions, can be very complex. They are document-heavy. They are rarely very simple arms-length transactions,” he says. “Many individuals have the wisdom to work through those transactions, but I think it’s always better to have another set of professional eyes on something important. Especially when you think about the potential value of the transaction to yourself.

Find out what your home is worth

Before you take any steps to sell your home to anyone, find out what it’s worth. Before accepting any offers, it’s important to understand what similar homes in your community are selling for, and what buyers are willing to pay. “The only reason I can think of is that there is a demand for housing stock in my city [for] “Selling by owner is about making more money, not less,” says Wood.

Control the transaction

Most importantly, know that the decision to sell your property is yours alone. Don’t let anyone force you to make big financial decisions, and take the steps you need to take to protect yourself. “The key will be to control the transaction,” says Adamson.

If an investor wants to buy your home, remember to be in the driver’s seat. “At the end of the day, homeowners are the ones who have to accept the solution,” says Darjee. “You can always reject it.”

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