It’s not always easy to catch a Real Estate Investor scam. Luckily, we’ve been doing this for long enough to catch those red flags, and we will do what we can to help you avoid being scammed by an investor.
A while back I met with a homeowner and placed a bid on their house. A few days later they called and told me that I had been outbid by another investor. I was surprised to hear this because I had made what I considered to be a very aggressive offer. A month later they called and asked if my offer was still good. I told them it was and we closed two days later. At closing they told me that this other investor had really given them the run-around. Once he got their house under contract he had brought in other buyers to try and sell the property before he had even bought it. Sounds crazy but it happens all the time. When he couldn’t find another buyer he just backed out, leaving that client high and dry.
Here are the top 5 ways to avoid being scammed by Real Estate investors:
- Never sign an assignable contract. Do not sign a contract with the words “and/or assigns” written in it. In fact, in special provisions you should write “this contract is not assignable.” This is probably the easiest way to avoid being scammed. This will prevent an investor from trying to sell your house before they buy it.
- Ask for references. A good company will not mind giving you references. I can give you as many as you want.
- Verify funds. If someone advertises they pay cash for houses, they won’t mind you verifying that they actually have the money to close. If they balk at this request do not work with them.
- Ask for a short closing date. Even if you want to close in 30 days don’t tell that to the investor. Tell them you want to close in 3 days and your contract will not be assignable. You will be able to tell immediately if you are dealing with a real cash buyer or not!
- Do not sign a contract with a long option period or a long inspection period. Anything over 10 days should be a red flag. Many new investors want long option periods so they can back out if they can’t find a new buyer. Short option periods make this much more difficult.
If any of this sounds confusing just call me and I can explain it further. When we write a contract and shake your hand we intend on closing that deal. You are welcome to call our references and verify funds. We do what we say we’ll do and our deals close on time with no problems. That’s why we receive so many referrals from happy customers. We are very much a local company. You are welcome to stop by our office for a cup of coffee anytime.
If you have a house to sell in Amarillo or Canyon give us a call. We would be happy to make you an offer. You can call us at 806-359-7653. You can also visit us on our website.