PROVIDING QUALITY INVESTMENT OPTIONS

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How to Avoid We Buy Houses Scams

Have you ever been driving to work or running errands on the weekend and saw a sign on the side of the road for “We Buy Houses” or “Cash For Homes”? For many people, they don’t think twice about whether or not these signs provide real, trustworthy services. But for those who are looking to sell their home, and want to avoid the stress and hassle of working with a real estate agent, they need to know if the businesses or people behind the signs are scams or not.

If you live in the Baltimore area and need to sell your house fast, it’s understandable that you may feel uneasy about working with a company who uses small roadside signs to advertise their business. But at The Legacy Investment Group, we are passionate about providing service that is transparent and honest, you feel confident that we are here to help you.

So, before you sell your house or accept a cash offer on your home with just any company, learn how some scams operate so you can avoid working with them.

Sell Your House For Cash

How to Identify a Home Buying Scam

Application Fees

You should never have to pay someone a fee if they are the ones interested in buying your home. Home buying companies make their money after they purchase a home, fix it up, and either rent or sell the house — not from fees. At The Legacy Investment Group, we complete a free home assessment to determine the kind of offer we can make, but there are never any application fees, assessment fees, or purchasing fees.

Kitchen Table Closings

Even though selling your house with an investment company isn’t a traditional process, buying and selling property is still a very regulated process and requires certain paperwork and involves various people. When you sell your house, the final sale or closing should happen at a title company to ensure that everything is handled correctly, including liens, titles, and deeds. Never sign anything at your own home, including Warranty Deeds or Quitclaim Deeds. In addition, it may be a good idea to have a real estate attorney present who can ensure that everything is correct and proper.

Work With a Home Buying Company in Baltimore

Scam cash home buyers can sometimes try to present documents that aren’t necessary, including bank statements and pre-approval letters for loans. These documents are often fake as well. Homeowners who accept cash offers for their home don’t need to be pre-approved for anything and their own bank doesn’t need to be involved at all. This situation occurs often when the business isn’t located in Baltimore and is only communicating through email. When possible, work with a team who is local and you can meet them face-to-face.

Other Semi-Scams to Look Out For

Other than unnecessary fees, strange closings, and fake, unnecessary documents, there are a few other methods that people try to scam homeowners. These methods aren’t always illegal, but are still meant to take advantage of homeowners who aren’t familiar with the most professional way of managing cash offer situations.

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“Sub2” or “Subject To” Scams

If you hear the phrase “subject to” or “sub2,” you will know right away that it’s a scam. The company will still buy your house, but it will be “subject to” your mortgage. You will deed them your home, but the mortgage will remain in your name. If anything happens with the mortgage, it will directly impact your credit. Unless the company is able to provide cash for your home, it’s best to move on.

Short Sale Scams

Falling for a short sale scam can be incredibly dangerous. Short sales occur when the bank or mortgage company releases the lien on your home for an amount that is less than the remaining balance. Outside of a short sale situation, homeowners must pay the full principal balance and any interest due before the lien is released. And even when the bank does agree to release the lien, they could apply a deficiency judgement for the remaining balance, which homeowners will need to report as income on their taxes.

This typically happens when homeowners are behind on payments, but who have a lot of equity and the home doesn’t require any major repairs. The short sale process can last for months, and in some cases, the bank will deny the short sale just prior to a foreclosure auction. Short sales take a long time, mess up your taxes, and put you in a very difficult situation.

How to Avoid Potential Cash Offer Scams

Read Testimonials

When possible, read a company’s reviews and testimonials and ask to speak with previous homeowners who have sold their homes with them. Getting information from actual customers is a great way of obtaining valuable, trustworthy opinions.

Check the Better Business Bureau (BBB)

The BBB is a private, nonprofit organization providing reviews and other information about local businesses. When a business is accredited or has a strong rating with the BBB, they are much more likely to be a legitimate business.

Research the History of the Business

Cash home buyers who rely on scamming their clients won’t survive for very long. Look for a business who has more than five years of experience.

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Work With a Title Company or Real Estate Attorney

Even with a legitimate business, it’s best to work with a title company or real estate attorney and have them look over the contracts and deed documents. These third parties will ensure that everything is completed correctly. Title companies can even provide insurance that will protect you from issues down the road.

Don’t Sign Documents You Don’t Understand

When selling your house, there will certainly be documents that you have to sign. So it is essential that you fully understand what you are signing, or have a lawyer or title company look over the documents before you sign them. Trustworthy cash home buyers won’t pressure you into signing anything before you’re ready.

Conclusion

Unfortunately, there are home buying scams out there, so take the time to do your research before you make any final decisions. There are a variety of signs that a company isn’t trustworthy, and knowing what to look for can save you time, money, and stress for years down the road.

The Legacy Investment Company has helped homeowners sell their house fast in the Baltimore area for over a decade. We understand that it can be overwhelming and scary accepting a cash offer for your home, but when you work with us, we can guarantee that everything will be completed accurately and legally.

Whether you’re looking to sell a home you inherited, no longer want to be a landlord, or if you are facing foreclosure, the team at The Legacy Investment Group can help. Learn more about our cash offer process and give us a call today.

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.

The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.