4 Tips to Avoid Illegitimate Home Buying Companies

Work with legitimate home buying companies

When you want to sell your house, you can find many home buying companies with a quick online search. 

These companies claim that they can buy your house fast – regardless of its current condition. However, not all of these companies are legitimate. 

If you are considering putting your property on the market, there are many options available to you. These options allow you to sell your house fast. However, some home buying companies are not upfront about the selling methods they utilize. 

Putting your property on the open market can be a minefield. This caveat is particularly evident when you are mainly motivated by selling your home fast.

It can take up to six months to a year to close on an average property in actuality. This timeframe is undeniably too long – especially if you need the cash right away. This is when home buying companies come in offering their services.

Legitimate Home Buying Companies 

Genuine house buying companies assist homeowners with selling their property fast. Unfortunately, this industry is rife with illegitimate companies, scams, and misguidance. 

Suppose you are thinking about utilizing the services of a home buying company. In that case, you need to do your diligence in ensuring that they are legitimate – regardless of what is written on their website and social media platforms. 

Make sure you hire an honest and transparent home buying company.

The most straightforward way to go about this is to ask the company for proof of fund.

Whether it’s printed bank statements or an official letter from a solicitor – these documents must prove that they have the cash readily available to purchase your home. 

It’s essential to make sure that home buying companies have the funds available. They need to prove that they will not depend on listing your property on the real estate market or on a mortgage.

Proof of Existence and Legitimacy

Let’s say you have just put your property on the open market. You get a call from an individual expressing an interest in your property for sale and introducing himself as a real estate investor. 

They claim they want to buy your home in its current condition, and they are willing to pay cash for it as soon as possible.

Sounds like a good deal, right?

While legitimate home buying companies do operate like this, there are deceitful ones you have to watch out for. 

Before dealing with any potential buyer, you need to ask them for their company’s proof of existence and legitimacy. There are many ways to go about this. The best thing initial course of action is to do a little research.

You can ask them the following questions to get a conversation going:

  • What is your office address?
  • Would it be possible to schedule a meeting at your office?
  • Who is the owner of the company? Can you give me an overview of the company’s history?
  • Do you have a website you can check out?

Evaluate the answers you get. Did they provide non-answers and just beat around the bush? 

Your primary goal is to ensure you are dealing with an honest and legitimate company. Don’t hesitate to follow up and push for more information. A legitimate company is more than willing to provide you with whatever answers you need – because they have nothing to hide. 

On the other hand, dishonest companies can’t even provide straightforward answers to simple questions. 

If you are not the aggressive type and are uncomfortable asking questions in person, use the internet. The Better Business Bureau is an excellent resource to check for the existence and legitimacy of a business. 

Avoid Long-Term Exclusivity Contracts

Also called lock-out agreements, these are legally binding contracts. They give home buying companies the sole and exclusive rights to purchase your property. 

Don't sign long-term exclusivity contracts from home buying companies.

On top of that, these long-term exclusivity contracts typically allow a home buying company to advertise your house online.

If you try to get out of it, or if you decide you want to sell your home to a buyer you’ve found, the home buying company can take you to court.

As such, it can cost you thousands of dollars in court fees.

A legitimate home buying company will not attempt to lock you in a long-term exclusivity contract. Typically, they can complete the sale in a week – or even less. Therefore, contracts with a long-term exclusivity clause are not needed. 

Thus, when you work with a home buying company and they rope in an exclusivity clause in your contract, make sure to run the other way and find a legitimate company.

When Home Buying Companies Are Too Eager to Buy Your Home

Before making you an offer, an honest and legitimate real estate investor will want to collect as much information as needed about your property.

They may need to visit your property in person or ask for photos. They may ask for a list of home upgrades or repairs needed for your home. 

Purchasing your property is a significant investment decision for them. Thus, they need all pertinent information so they can give you a fair cash offer. 

It’s doubtful that a genuine home buying company or real estate investor will be too eager to close the deal without learning anything about your property.

This is especially true if you are selling a distressed home or if you have an older property.

If the home buyer is attempting to get you to sign an agreement without allowing you time to think things over, it stands to reason that they may be trying to speed things up – and not for your convenience. 

Selling your home is something you need to be comfortable about.

Be concerned if your potential home buyer gets a little overeager – to the point that it’s making you feel uneasy. 

If the real estate investor is getting a little bit pushy when buying your home, that could be a red flag. A legitimate real estate investor or home buying company will never push you into an agreement if you still have concerns or questions about the overall transaction.

They Keep You Waiting for Too Long

This scam is the opposite of an overeager homebuyer. A dishonest real estate investor or home buying company will try to string you along. They will make promises about paying cash for your property without even providing proof for their financial claims. 

While it’s true that any potential buyer may ask for time to secure funding, you need to make sure that your potential investor is honest about their financial situation. You wouldn’t want to be deceived and miss out on better selling opportunities.

Mistakes to Avoid When Selling Your Home to Home Buying Companies

To anyone who has tried to sell their property, the process can get stressful, emotionally challenging, and time-consuming. This is especially true if you’ve never tried it before. 

There are times when it can feel like strangers are invading your privacy when they come to your house showing. You may hear some criticisms about something in your home – things that these strangers don’t know hold sentimental value to you.

These factors can often lead to a lot of slipups for first-time sellers. Fortunately, you can avoid these issues, get the highest possible offer for your home, and sell your property within a realistic time frame.

Here are some common mistakes to avoid for first-time property sellers. 

Try Not to Get Too Emotional

Try not to let emotions dictate your home selling process.

Remember that selling your home is a business transaction. Thus, you must focus on the business aspects of the process.

It’s understandable to get emotional about selling your house. It’s more than just four walls for you and your family.

It may be challenging to stay levelheaded when it comes to saying goodbye to your home. 

Set a Realistic Price for Your Home

Naturally, you would want to get the maximum amount of money you can get from selling your property. However, your house may not have that much worth. 

Remember that overpriced properties don’t sell. In fact, overpricing their home is the number one mistake of first-time sellers. 

Even if you set your pricing on the lower side, you can always refuse any offers that are too low. Additionally, if you put a lower price for your property, it’s more likely that you get multiple offers. You can then bid fair pricing that is equivalent to your home’s actual real estate value.