If you’re thinking of selling your home to a company, check out this article on how to avoid we buy houses Jacksonville scams!
We have all seen the marketing. Whether it is a yard or “bandit” sign, post card, a TV commercial, or even someone calling you out of the blue, you have likely seen or heard the same messages – “We Buy Jacksonville Houses Cash,” or “Sell your Jacksonville Home Quickly for Cash,” or even “We Buy Dilapidated (or Ugly) Homes.” Heck, you have seen very similar language right here on this Website, because let’s face it, that is what we do.
The abundance of these marketing messages, along with the growing number of companies behind them targeting home sellers, leads many to question how legit it may be. Are these companies really going to buy your home for cash, or is it merely a scam? That answer is not always so simple. Depending on who you are actually working with, it could be either. If you are working with Mac Home Development, yes, it’s legit. But if you are working with someone else, it could in fact be a scam.
As we have discussed before, there are plenty of reasons a homeowner may need to sell his or her home quickly – be it a new job in a different state, falling behind on the mortgage and facing foreclosure, or the home needing too many repairs so that the owner needs to get out quick. That’s where the I-buyer company comes into play. Many of these companies can and will save sellers from these unfortunately situations.
But be aware, not all home buying companies are alike.
A lot of these “We Buy Houses” companies are not actually going to buy your house. Read that again. Many of these companies never intend to buy your house.
Instead, what they plan to do is sell the contract to another investor for a profit – a process often called wholesaling – often a profit greater than that being seen by the actual seller. What that means is that the seller left equity on the table by agreeing to “sell” to the company.
And what if they can’t find another investor to buy that contract? Well, then they simply cancel the contract with the seller, leaving him or her right back at square one, dealing with the issues they thought there we going to be relieved of. Basically it’s a big waste of everyone’s time.
So how do you identify and avoid these companies that are not in it for the right reasons? Here are some tips on how to avoid we buy houses Jacksonville scams. 
- Always ask for a large escrow deposit. An escrow deposit is the amount of money that both buyer and seller agree that buyer will place into a third-party escrow account that binds both parties to the agreement. Once in place, the buyer is bound to the confines of the contract, and the money can be forfeited if they default on the agreement. A legit home buying company has money and should have no issue putting a large binder into escrow since their intention is to fulfill the contract and buy the home. Someone who is not serious about buying your home, and therefore is more likely to default on the agreement, is less likely to put a large amount of money down. A general rule of thumb is to ask the seller to place 2% of the purchase price into escrow as their deposit. If they refuse, consider that your first red flag.
- Ask for testimonials and references. As they say, you have to start somewhere. But are you willing to risk one of your biggest assets, your home, on someone without a bunch of experience? A legit company will always be able to provide you with written testimonials from sellers they have worked with in the past. They should also provide you with references from other professionals they have worked with like title companies, attorneys, and real estate agents. Due some research and make sure these are not just comments on social media, and that the companies providing the recommendations are legit. Anyone can get a friend to refer them. Only the best companies will have a wide range of testimonials from past clients. And dig deep. Often companies will cover up bad reviews by asking others to write good ones, pushing the honest reviews pages down where few will ever see them.
- Due your due diligence. Speaking of doing research, there can’t be enough said about doing your due diligence to learn as much as possible about the company trying to buy your home. Any reputable company will have a strong online presence. Is their website legit, transparent, and useful, or is it a “do-it-yourself” site that was made in 10 minutes. How is their social presence? Does their online personality reflect a company you can trust? Finally, do they have complaints on them filed with the Department of Business and Professional Resources, or the Better Business Bureau? Knowing the answers to the questions in advance can help you avoid some agony down the road.
- Always insist on closing at a title company or with an attorney. A legit home buying company will take responsibility for all of the closing costs in the transaction. So if they are the one paying, you should make sure they use a legit closing company to account for all funds and documents, while also caring for important parts of the process such as running title searches, and notarizing the formal documents. They also hold the escrow deposit and issue your payment at closing. Never – EVER – sign closing documents without the guidance of a title company or attorney. And just as we said earlier – do your due diligence! Make sure the title company and/or attorney are well-renowned as well.
- Don’t sign any documents that you don’t understand. If a home buying company provides you with a contract or any other documents requiring your signature and you don’t understand them, then don’t sign them. A contract is a legal document and once you sign it, there is no going back. You can’t simply change your mind without opening yourself up to litigation. Some companies will add verbiage in the contracts that allow them to back out at any time as they see fit – and get their binder deposit back. This can leave sellers in a bad spot especially if they are buying another house and need the money from the proceeds to purchase it. If you don’t feel comfortable or the company can’t explain each line to you in contract, have a trusted professional look it over.
- When possible, work with a local company. There are a lot of “online” home buying companies. Some are completely legitimate and some are not. Some of these companies know the local market, but many don’t. Many will offer you more money for your home than others, but that’s because they don’t understand the nuances of our market. Once they realize they are overpaying, they simply cancel the contract or ask you, the seller, to amend it. If you use someone local, you will have a real life person to come to your property and do a walk through. A local company will know the neighborhood and be able to provide you with more accurate information and often a better price because they know the area and recent sales.
- Ask a lot of questions. Once again this touches on the seller’s responsibility for due diligence. The best way how to avoid the “We Buy Houses Jacksonville” scams is to ask a ton of questions! Don’t be afraid to ask for a proof of funds that the company has enough money to purchase the property. Ask questions that will make you feel comfortable working with the company. Questions like, “What happens if the inspection shows a major repair,” or “What happens if I need to move closing up or back due to an unforeseen schedule change? These are all questions that need to be answered before contracts are signed.
The only way to make sure that you are going with a reputable company is to follow these tips and make sure you as the homeowner are fully protected. Selling your house can be one of the biggest things you will have to do in your life and it shouldn’t be a stressful situation to do so.