For most homeowners, selling your home via the MLS (Multiple Listing Service) with the help of an agent is the best way to hand over your property. However, it’s not always possible. If you don’t have a lot of equity and your home requires a ton of repairs, you may not make enough money to cover the agent’s commission and still earn a profit.
What are your alternatives? For one, you can find an investor willing to make a cash offer.
Selling to an investor often allows you to sell fast, without closing costs, and without having to make expensive repairs. If you decide to go this route, just make sure you’re not getting scammed.
For as many legitimate investors are out there, a lot of disingenuous people try to pretend to be an investor just to scam vulnerable homeowners. Here are some ways to avoid losing money and time when selling your home to an investor.
Be Wary of Upfront Costs
If someone offers to buy your home for cash, but you have to pay a bunch of upfront fees or deposits — consider it a red flag. Most legitimate investors won’t charge you any fees or major expenses. They certainly won’t begin your relationship by asking for a huge check.
You should be especially wary if someone approaches you via email and asks for money to appraise your home for an all-cash offer or says they can only work with you after you pay them. These are hallmarks of scam artists who may not even be investors at all. They could bail after they get your check.
Deal Face to Face
If someone is offering to buy your home from afar, you may also want to think twice. Foreign investors who seem eager to buy a property sight unseen could be problematic for a few reasons. First, they are unlikely to be very familiar with the Sacramento real estate market. Second, you will be dealing with a foreign money transfer and probably won’t ever get to meet the investor. If anything goes wrong, it can be hard to hold them accountable.
A local investor knows the Sacramento real estate market. They can come to your home and give it an accurate appraisal. You can check their ID, make sure they’re legit, and move forward with more confidence. When in doubt, find a local buyer!
Make Sure You’ll Be Paid Quickly
If a company doesn’t have the cash to pay you in full, quickly, don’t do business. The benefit of working with an all-cash buyer is getting paid fast! If you are expected to wait for months to receive your final payment, the investor is not solvent enough to buy your home. Even if you’re not getting scammed, you shouldn’t have to wait for a long time to receive your final check.
Ask for references from your investor. Find out how quickly they received their check. You may also want to scout out consumer review sites, including Yelp, where customers can leave good and bad feedback.
Never Give Immediate Refunds
Finally, a major red flag is an investor who writes you a check but then explains why they need a fast refund (they discovered they over paid, etc.). If you send a refund, but their check bounces on your end, you could be out thousands of dollars. A reputable investor will offer you a fair price, put it in writing, and if and when anything changes — there will be a documented and legal process for altering your sale agreement. A phone call asking for some of their money back the day you cash their check is suspicious. At the very least, wait until their check clears to proceed.
Are you looking for a legitimate investor to buy your home? At California Family Homebuyers, we have references and are happy to meet face to face. You can reach us any time at 916-496-3737!