Have those advertisements for people saying, ‘we buy houses’ caught your eye and made you question whether they are we buy houses scams? This is a very real concern for people considering this kind of service.

Trying to sell your house fast in Tennessee? Are you concerned that you might get taken advantage of or have the wool pulled over your eyes?

JOIN THE CLUB.

The traditional way to sell a house is using a real estate agent and having them list your house.

Maybe you would rather skip the hassles and sell to a Tennessee cash home buyer, like TN HomeBuyers, instead. Every year, thousands of people sell their homes directly to investors rather than listing with an agent.

If you’ve never sold a home before or never sold one without the services of an agent, it can be quite scary. It can seem downright overwhelming.

I’m going to share some tips for you to make sure that who you are working with is a legitimate house buyer and not someone looking to scam you. By the end of this article, you’ll be armed with what you need to know to choose the right company to buy your house.

The Sniff Test For We Buy Houses Scams

There are a lot of legitimate house buyers in Tennessee, but there are also some people that are running we buy houses scams. It can be difficult to know which one you might be dealing with.

The stakes are high. People have lost lots of time, money and even their houses to scams run by investors that don’t have any sort of moral compass.

It can be difficult to determine if who you are dealing with has your best interests at heart. Most of the time there are “tells” that will clue you in to their true intentions. These signs can mean you are caught in some of the we buy houses scams being used today.

1. Application Fees – If a house buyer wants you to pay them any kind of fees to evaluate your house, run away as fast you can. This person is likely a scammer. Honest home buying companies don’t make money charging application fees. They make their money from buying houses, fixing them up and either renting or selling the house.
2. Kitchen Table Closings – If a buyer wants you to sign over the deed to your house anywhere other than a title company or attorney’s office, you’re likely going to be making a costly mistake. Any sale you have should happen at a title company so that you can make sure the paperwork is handled properly and all liens are taken care of.
   Please do not mistake this for signing a contract to sell your house. That can and probably will happen at your house.
3. Too Much Information is Given – Phony bank statements and pre-approval letters for loans are given without being requested from untrustworthy real estate investors. These investors present these documents to make them appear legit but these documents can easily be faked.

Other Not-so-obvious Semi-Scams to Watch Out For

There are many other situations that I call ‘semi-scams’ to watch out for. These may not be illegal or full-blown we buy houses scams but are intended to take advantage of you and your situation.

It’s best to avoid these at all costs.

• Out of Area Wholesalers – Wholesalers are investors that do not typically buy your house themselves. It’s seems the majority of these wholesalers are not even in Tennessee. They are out of area investors that target Tennessee because of the affordable housing. Many times these investors will pretend they are going to buy the house when in fact they have no intention of doing so.
  How it works is they put your house under contract for them to buy and then they go about finding a buyer that has the money to buy the house. When they find the buyer, they assign the contract they made with you to the capable buyer for a fee.
  This makes them the middle man that is taking a hefty fee that could have been profit to you.
  I recommend you find a house buying company that has the means to actually buy the house so that you maximize the amount of money you make from the sale.
• Short Sales Scams – Short sales are where a bank or mortgage company agrees to release their lien on your house in exchange for less than the principle balance of your loan. Typically, you have to pay off any principle balance and interest due for them to release the lien. When they agree to accept less, you are performing what is called a short sale.
  A short sale in and of itself is not a problem, it’s when this is attempted when it doesn’t make sense that causes a lot of problems for Tennessee homeowners.
  If you are behind on payments but have a lot of equity and a home that doesn’t need any major repairs, you might have an investor convince you to attempt a short sale.
  Short sales can drag on for months and the bank may wait until just before a foreclosure auction to deny it. Then what are you going to do? You won’t have time to sell it. It’s almost certain to be lost to foreclosure.
  Some careless investors don’t give you all the facts when they attempt a short sale on your house. You also need to be aware that even if the bank agrees to take less for the lien to be released, they could put a deficiency judgement on you for the amount the loan was shorted. You will probably also have to report the amount shorted as income which could cause your income tax owed to be a real problem for you.

How to Avoid These Potential Scams

Do your homework to avoid we buy houses scams.

With some quick research you can easily determine whether somebody has a history of doing what they say. You can also find out if they’ve been in business for a while which shows they are stable and worthy of your business.

Crooks rarely stay in business long and almost always have negative reviews.

• Check testimonials – Be sure to look for online reviews and testimonials for the house buying company you are considering. Any reputable business will have statements from previous customers that can attest to how they do business. 
• Check the Better Business Bureau – The Better Business Bureau (known as the BBB) allows consumers to leave reviews and rate local businesses. You should only work with house buying companies that have a strong rating with the Better Business Bureau.
• Check how long the company has been in business – Great businesses have been around for a while. According to the Small Business Administration, nearly one third of all businesses fail within the first 2 years. If you find a business that’s been around for longer than 5 years, you can probably bet they are still around for a reason. They probably are doing something right.
• Make sure to close at a title company – There is so much legal talk in contracts and deed documents that you simply must have a title company or real estate attorney handle the closing.
• Don’t sign documents you don’t understand – This one seems to be common sense but is definitely not common practice. If you don’t understand something, don’t sign it.

When selling a house fast to a local house buying company, you should be aware of the signs of a potential we buy houses scam.

Armed with the knowledge from this article you are much better prepared to find a great house buyer for your house that will treat you with respect and do what they say they are going to do.

If you would like to get a fair cash offer for your Tennessee house, do not hesitate to give us a call at (561) 349-4292. We would be glad to answer any questions you have and help you in any way we can.