Top 3 Cash Buyer Scams

Cash buyers are great right?
Not always. 
There are several scams out there.
Here are the most common three that we’ve heard of lately.

Scam # 1
What to watch out for:

• Foreign buyer.
• Wants to buy the home sight unseen.
• Not very concerned about the condition or details of the property.
• Unable to speak by phone – all correspondence via email.
• Often shares way more info then necessary – very detailed story.
• Usually in a hurry.
• Eager to send down payment, earnest money, or even the full price of the house.
• Oops, they send too much money & request refund for the over-payment.

It takes a while for foreign checks to clear. The scammer’s check is going to bounce (or it will come back as a forgery) & the money you sent back is now GONE!

Scam # 2
What to watch out for:

• Wants to put the house under contract with no earnest money.
• The contract includes several “out clauses” for the “investor.”
• The contract allows for “re-assignment.”
• Unprofessional &/or inexperienced.
• No references.
• In no hurry.

These “buyers” are not actually interested in the property. They just want to assign their contract to a third party and receive a fee for the assignment. The majority (90% +) of these deals never get to closing. They usually don’t find an interested third party and just end up wasting everyone else’s time.

Scam # 3
What to watch out for:

• Reluctant to share current address &/or other properties owned.
• Offer is full list price or even higher.
• Often contact the Listing Agent directly (no Buyer’s Agent)
• Wants to put the house under contract with no earnest money.
• The contract includes several “out clauses” for the “buyer.”
• In no hurry.

A little digging (search on property appraiser’s web site) may reveal that the “buyer” (or someone he/she knows) owns another similar property nearby which is currently for sale. These “buyers” are not actually interested in the property. They just want to tie up this property to help sell their own. They are hoping that 1) buyers won’t look at this property since it is under contract &/or 2) the “sale pending price” on this property will help justify the “list price” on the property that they are selling.