Youve seen the signs on telephone polls, We Buy Houses, fast sale, cash, etc. Real Estate investing has a new crop of scammers, only this time theyre not trying to get you to buy their useless Real Estate System, no this time they want your house.
Now before we go any farther, I feel the need to that this article is only referring to unethical or scam companies. There are many legitimate House Buying companies who help a lot of people get out of bad situations.
To explain a scammers business model in a nutshell. They buy houses quickly and for cash. To do this they usually have someone else lined up to resell the house to. Doesnt sound too diabolical so far right?
Its how they make their profit which is questionable. Its made from the equity in your house. You see, theyre only willing to pay just enough to get you to sell. They start by coming to see the house, they walk through and talk with you. Theyll try to get you to tell them how much you own on the house, even though its none of their business. They do this to convince you to trust them, that they want to help you.
The only one theyre looking out for is themselves, this is their business and they do it by convincing you your house isnt going to sell any other way, that its in needs repairs. Youre not going to benefit from this deal.
It gets worse. No only will they claim their offer is the best youre going to get, depending on how they operate, you might end up not having enough money to pay your outstanding mortgage once you do sell.
The worst companies will try to get you to sign over your deed, you might think your house is sold but its not because you still have a mortgage on it. Now they control your house and youre stuck with a mortgage to pay. Avoid any deal that doesnt involve full cash payment upfront, or through escrow.
If you are thinking of using a We Buy Houses service, be sure to read everything before signing, get all agreements in writing and ask questions about anything you dont understand. If you need help talk to bank, also investigate the company by calling any applicable state real estate associations to find out about any complaints by previous customers. Rule #1, dont believe everything they tell you, follow this advice and youll be safer and happier.
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