The traditional method of selling a house has become increasingly outdated. Waiting several months to find a buyer, negotiate on price, carry out searches, and plenty more is tedious and stressful.
In many instances, property sellers are turning to cash-buying companies as a preferable alternative. However, while some organisations (like We Buy Any Home) have a proven trustworthy track record, others seem different.
So, how can you tell the difference between a ‘scam’ and the real deal?
There are a few key indicators that a cash-buying company is trying to scam you. In the blog below, we have explained some of the most common ones so you can keep an eye out and only sell your house to someone you can trust.
What is a Quick House Sale scam?
Legitimate cash house-buying companies can purchase your property for cash, up-front, in a concise timeframe. They will offer you below the market value, but in return, you will not have to pay for legal fees or a commission on the sale. You will also sell to a chain-free buyer who can complete the deal within any timeframe.
Unfortunately, not all cash-buying companies are legitimate, and some will mislead you. There have been plenty of instances where imposters poise as cash-buying companies, with the aim of convincing you to sign over the title deeds of your property without you ever actually receiving any money. This would result in you selling your house for absolutely zero.
It would help if you kept an eye out for warning signs that a cash-buying company is not legitimate. We have explained six of the most common red flags below,
Warning Sign 1: Never speaking to a natural person
If you are only ever speaking to someone via email, text message or over the phone, then you should be cautious. It is always preferable to meet with a representative of the cash-buying company in person before you proceed with the deal. When so much money is on the line, this is the least they can do, and if the business drags its heels about meeting you, you may want to back away.
Warning Sign 2: Refusing to show proof of funding
You are entitled to request proof of funding from a cash house buyer. Any person selling a house can ask for this, and selling to a cash-buying company is no different. Any legitimate organisation will already have all the funds needed in-house and, therefore, be completely happy to share this proof with you. It should not be trusted if the business refuses to provide evidence of its funding.
Warning Sign 3: No reviews from previous customers
One of the safest ways to identify whether a cash-buying company is legitimate is to check its reviews. By searching online, you can find hundreds (or, ideally, thousands) of independent reviews describing their experience working with the company.
On the other hand, it could also be suspicious if the business only has positive 5-star reviews and no negative feedback. You could even ask the company to speak directly to one of their references or reach out to one of the happy former customers yourself.
Warning Sign 4: Offering you the total market value
If the offer you receive from a cash-buying company seems too good to be true, it almost certainly is. These organisations make a profit by buying your house at below market rate and then selling it for more further down the line. Therefore, if they offer a lump sum of cash at the full market rate, this is a significant warning sign, and you should back away from the deal quickly. Companies that do this are inauthentic and highly unlikely actually to pay you your money.
Warning Sign 5: Tying you into a restrictive contract
We Buy Any Home will not tie you into a restrictive contract at any time. Since we are a reputable, trustworthy cash house buyer, you are free to walk away from the deal anytime.
By contrast, if an organisation tries to make you sign a contract that forces you into an agreement, you should be extremely cautious. You should be free to change your mind at any point before the contracts are exchanged, so if the company is trying to create a situation where this is not the case, you should walk away.
If in doubt, it is recommended that you get legal support with any contracts that you are presented with.
Warning Sign 6: Doesn’t belong to any industry bodies
The property industry is heavily regulated in the UK, and the most reputable cash house buyers (such as We Buy Any Home) belong to bodies that prove our legitimacy. Common examples include The Property Ombudsman and the Information Commissioner’s Office.
You should ask any cash house-buying companies that contact you which industry bodies they belong to. Ideally, you can then research these bodies and find out what protection they offer you (i.e. reassurance that the activities of this company are monitored). Suppose the business doesn’t belong to any industry bodies. In that case, you should proceed with caution and perhaps question them about why this is the case.
Warning Sign 7: They contact you rather than you getting them
At We Buy Any Home, we only provide a free cash valuation on your property once you have contacted us and asked for one. However, if you receive unsolicited offers – such as companies cold calling, emailing or texting you, then you should be wary.
A trustworthy cash house buyer will advertise their services and then wait for you to reach out to them – not the other way around. Anyone who contacts you ‘cold’ should be avoided.
Warning Sign 8: You can’t find a digital footprint
In the modern era, it isn’t very certain for a thriving, financially strong organisation to not have a digital footprint. Not only should you be able to find independent reviews on the internet, but the company should ideally have a website, email address, and Companies House listing.
Within the context of a cash house buyer, these things are inexpensive, so if an organisation does not have them, they are unlikely to be legitimate, and you should refrain from doing business with them.
Warning Sign 9: Unclear payment structures
For any reliable cash house buyer, the payment method is straightforward: the company purchases your house for up-front cash at a below-market rate to sell it for a profit further down the line.
Suppose the cash buyer you work with wants any up-front payments before a deal has been completed or uses a complicated payment structure. In that case, this is something to avoid at all costs.
Warning Sign 10: Mixed messages
Not only should your cash house buyer be able to answer all of your questions, but you should encounter any mixed messages. The cash house-buying process can be extremely straightforward and isn’t necessarily complicated.
Therefore, if you (or they) are getting tied up by complex procedures, mixed messages or inaccurate statements, you are not working with a trustworthy company.
