It’s an unpleasant feeling if you’ve fallen for a scam. But when it comes to selling a house, this is definitely a scam you don’t want to fall victim to. It’s hard, though, if you’re trying to sell your Connecticut home to avoid foreclosure or need to move quickly to start a new job in another city. Even if that’s not the case, most people don’t want to wait around for their house to sell. So when you see something advertising a way to sell your house quickly and in as-is condition, it sounds almost too good to be true. Since you need or want to find a buyer for your home right away, you may miss some of the signs of a house buying scam. Below we’ll cover the common real estate scams and how to avoid and spot a scam before you become the next victim.
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House Buying Scams in Connecticut
You’ve probably seen those “We buy houses Connecticut” signs around town, usually posted at busy street corners or attached to electrical poles (not sure if that’s even legal), claiming that you can sell your house fast or fast cash. Are they legit? Do they really buy houses for cash?
Well, first of all, it’s not recommended to call a number on the side of the road to sell your house. When it comes to selling your biggest asset, your home, you definitely don’t want to get caught up in a house buying scam.
In this article, you’ll learn:
- How to Spot a House Buying Scam in Connecticut
- How to Avoid Being Scammed
- Types of House Buying Scams to Look Out For
- What to do if You’re Scammed When Selling Your House
Spotting a House Buying Scam in Connecticut
The best way to avoid a real estate scam is to know how to spot one in the first place. Some signs are pretty obvious, others may require a bit of investigating on your part. One thing that should be mentioned, not all of the cash home buyers in Connecticut are scam artists. There are several “We buy houses” companies that are very reputable and truly do buy houses in as-is condition and can make you a cash offer. One such company is Ocean City Development. That said, it’s still important to know how you can spot a house buying scam in Connecticut.
When it comes to home buyers, the barrier to entry is low. Currently, you don’t need a license, permit, or certification to claim to be a home buyer or investor in real estate. So basically, anyone could stick a “We buy houses” sign on the side of the road. Ideally, the home buyer you want to work with has a professional website, is a BBB accredited business, is reachable by phone, and doesn’t use bandit signs to advertise.
Another way you can spot a house buying scam is by reading their reviews online. Do a Google search of the home buyer you’re interested in working with and see what their reviews say or if they’ve been involved with any scams before. If this isn’t a legitimate business, someone may have left a negative review mentioning a home buying scam.
Before you work with any home buyer, you want to research everything you can about them.
Below are a few of the red flags you’ll want to watch out for:
- Use of bandit signs – the legitimate home buying companies don’t use these to advertise
- Use of a free email service, which tends to imply unprofessionalism
- Unprofessional phone etiquette: answering “Hello” versus “Ocean City Development, this is John, how can I help you?”
- Doesn’t have any references when asked
- Questionable or sketchy references that can’t be verified
- Little to no knowledge of state and federal regulations/laws regarding real estate
- Doesn’t use professional forms or state-regulated documentation
- Extremely difficult to contact via phone or email
- Uneasy or offended if you ask to have a third party (like an attorney) look over the contracts
- Offer to buy without ever looking at the property
The key money warning signs include:
- Processing or administration fees
- Eagerness to send the buyout money right away, even without seeing the property
- Willingness to share their financials
→ Want to Find The Best Home Buying Company in Connecticut? Click the link to find out how.
How to Avoid Being Scammed
Besides doing some due diligence before even talking to a home buyer, once you’ve narrowed down your search, there are still a few ways to safeguard yourself from a home buying scam. Let’s take a look at some other ways to avoid getting scammed when you go to sell your CT home.
Know Who You’re Negotiating with
When you take the next step in the process and find a home buyer you’d like to call, make sure you know who you’re negotiating with. You’ll want to get the person’s name and details about the company. Find out how long they’ve been in business, how many homes they’ve purchased, and where the closing process is handled, i.e., a legit title company.
Verify Communications
Another way to avoid getting caught up in a scam is to verify communications. Google the phone number and email address associated with the home buyer you’re talking to and see what pops up. Professional home buyers have a legit phone number and professional email address. And should be reachable anytime. If you’re always leaving voicemails or emails are going unanswered for a while, that’s not usually a good sign.
Research House Buying Process
When it comes to working with a “buy my house Norwalk” home buyer or really any real estate investor for that matter, it’s important to have a general idea of the house buying process early on. Typically, you contact the home buyer or fill out a form on their website, they will ask you some questions about your home and if any work needs to be done to the place. Then they will schedule a time to do an in-person or video walkthrough with you.
Once they take a look at your home, figure out what repairs need to be made, and do some research into the local real estate market, they’ll make you a cash offer for your property. You should be under no obligation to accept the offer, and a professional home buyer won’t mind if you’d like to get an attorney to look over the contract. From there, you should be able to schedule closing when it’s convenient for you.
The home buyer you want to work with has their home buying process mentioned on their website and should be willing to explain it further if you have any questions.
Any home buyer that offers to purchase your property sight-unseen you should question. Frankly, do you know anyone comfortable enough to buy a house without first looking at it? The homebuyer you want to work with will ask to see your home in person or by video. So you should be extremely cautious of anyone who doesn’t request to see it first before making you an offer.
Keep Your Information Safe
Make sure you eliminate email correspondence when it comes to sensitive information or closing details. Although email does provide a permanent record and an easy way to have everything in writing this is an easy way for your information to be unsafe. So, you’ll want to make sure whoever you’re working with uses encrypted emails or some setup that requires additional login credentials to gain access to the communication. The home buyer you’re working with maybe legit, but hackers can still interfere with your home sale and steal personal information from an unsecured email.
Types of House Buying Scams to Look Out For
Sadly, scammers are out there, some don’t even involve the home buyer but rather are hackers who could be disguised by using an email that looks like the title company you’re working with. Below are a few other types of house buying scams in CT you’ll want to look out for.
Cash Offer on House Scam
When you request a cash offer for your house, it should be free. You shouldn’t have to pay for processing or administrative fees to receive an offer. A legit home buyer will write you a free proposal and leave you with the option of accepting it or not. Even though a cash offer on your house scam may only cost you a few hundred dollars, any amount of money isn’t worth losing.
We Pay Cash for Houses Scam
The keyword here is “we pay,” not “you pay”. When it comes to the flow of money in a home buying transaction, money should always flow from the buyer to you. Not from you to the buyer. So if the buyer tries to get you to pay for anything upfront, this should be a big red flag.
Wire Transfer Scam
This particular scam may not involve the home buyer but rather a scammer disguised as the title company you’re closing with. What usually happens is you’ll receive an email, phone call, or text message from someone claiming to be from the title company that gives you wiring instructions.
The scammer sets up a fake website that will appear similar to the lender or title company you’re working with, making it appear to be the real deal. Scammers will use spoof tactics to make the phone number, website, and email address appear similar, but usually with one letter or number off- so at a first glance you’ll miss the typo. Ultimately, what ends up happening is the funds are withdrawn from an offshore account in another location by a fraudster.
The best way to avoid a wire transfer scam before you send any money to a third party is to always check the original documents you got from your lender and call the phone number provided to verify the wiring instructions you received. Never click on email or text links, or send money online without first confirming instructions with a live person on the phone from a number that you’ve called and verified.
Also, be cautious of any email or text messages requesting a change to wiring instructions you already received. Double-check the escrow account number before wiring money, and call your settlement agent to verify the transfer of funds immediately after you’ve wired the money.
What to do if You’re Scammed When Selling Your House
Usually, people are embarrassed to say they’ve fallen victim to a real estate scam. But the best way to stop the person from scamming another unknowing victim is to file a complaint.
If you think you’re being targeted in any scam related to your Connecticut home, it’s essential to take steps to notify the proper authorities. A good place to start is with the FTC. When you file a report with the Federal Trade Commission online, it’s entered into a database that reaches local, state, and federal law enforcement agencies.
You can also file a complaint with the Better Business Bureau’s Scam Tracker, which will help notify others like you about potential fraud activities. Furthermore, if you want a better chance at connecting with an individual to hear your complaint, consider contacting the Connecticut consumer protection agency, as well.
After you’ve been scammed, you will likely need to do more than simply file a complaint, mainly if the scam has involved any of your private information (checking account numbers, social security number, driver’s license number). IdentityTheft.gov is the government’s online portal for anyone worried that a criminal is acting on their behalf.
Remember that selling a home isn’t the only target of scams, either. Be sure to be on the lookout for these scary money scams that target your financial accounts.
Final Takeaways
Sadly, real estate scams are on the rise. The FBI reported in 2020 that Americans lost more than $220 million in real estate wire fraud scams, a 13% year-over-year increase. The best thing you can do to avoid a scam is to do your research before working with any real estate investor, ask questions, check their website, reviews, and BBB information. Most importantly, if the homebuyer makes you feel uneasy, listen to your gut instinct.
Ultimately, the homebuyer you want to work with will clearly explain their home buying process and how it works. They’ll make you a cash offer for your home in writing and won’t place any financial obligation on you if you choose to say no. Furthermore, there shouldn’t be any realtor commissions, service fees, or repairs required.
If you accept their offer, you should be able to negotiate with them over any closing costs. Finally, the investor will pay you the agreed-upon amount in cash (or however you prefer to be paid) and close the home sale on your terms—even closing in a matter of days if you prefer.
Along the way, you should be able to ask questions and get answers before even talking about money because a true home investor like Ocean City Development is happy to answer your questions, free of charge.
So if you’re saying, “sell my house fast New Haven,” Norwalk, Bridgeport, Danbury, or any other city in Connecticut, give Ocean City Development a call today!