Some signs your “cash buyer” might be a scammer

Some signs your “cash buyer” might be a scammer


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When your property is for sale and the buyer is proclaiming he or she is willing to make a cash deal, it is far more apt to modify the old adage to emphasize, “… let the seller beware.”

It may be an unfortunate reality, but a seller may become the victim of a scam when they enter into a contract with a self-described cash buyer. As has been repeated on numerous occasions, when dealing with an unknown buyer in perhaps the largest transaction of your life, make sure to have your agent do appropriate diligence, vet the buyer as thoroughly as possible, and most importantly, if something sounds too good to be true, then most likely it is – and, God forbid, you end up being taken for thousands of dollars in some kind of scam.

Though the scam may differ in complexity and originality, the bottom line is the same. The “cash” buyer is hoping to separate your money from your bank account under the guise of offering a legitimate offer for your listing.

The following is a short list of potential scam scenarios to help educate and protect unsuspecting sellers and raise the proverbial red flag before financial damage ensues.

1. The buyer is a hard-to-contact “wealthy foreigner”

You or your agent get a call or email from a wealthy foreign investor looking to purchase your listing without a walk through, for all cash. They assure you, they – or a representative – will send a large check as a deposit to “guarantee” the sale. Most often, the check is from a foreign bank and is written for more than the total sale price. You want to do the right thing and refund the difference. Unfortunately, by the time you hear from the foreign bank, you are told the check is fraudulent. Whatever you have paid out in good faith is now gone forever. The chances of ever seeing your money again are infinitesimal.

2. The buyer offers far too much information and is very eager to close quickly

Why would someone give you an inappropriate amount of financial and personal information before the requested or required time? They want to appear legitimate, when in reality, the “buyer” is hoping you will reciprocate with any information he / she will then use to help you part with your hard-earned money. The scammer may go as far as attaching bank statements to emails and asking you to do the same. Obviously, this is not a good idea – ever.

3. The buyer makes an “honest” mistake

Again, appearing to be very legitimate, the scammer sends a “good faith” check, which just coincidently happens to be several thousand dollars more than the negotiated price. But, do not fret. They are very agreeable about you sending a “refund” check while waiting for their cashier’s check to clear. Unfortunately, here again, you get taken when your check clears and theirs gets returned as fraudulent. To your chagrin, the bank that the cashier’s check is drawn on may not even exist.

4. The “investor” promises to pay top dollar for your listing

A “wealthy investor” with an absence of local references meets with you – telling you an agent is not needed – and promises to pay top dollar for your listing in cash, despite multiple issues and/or required repairs. You enter into a “good faith” contract and expect to receive your large payment soon. The problem is, the “investor” locks you into a contract you cannot get out of, while he / she is busy try to sell the contract to make a short-term “flip” profit. You get burned and the investor moves on to the find the next unsuspecting seller.

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