General Question

ItalianPrincess1217's avatar

Is this home buyer scamming me?

Asked by ItalianPrincess1217 (11657points) July 25th, 2018

My house is posted for sale on several different social media sites. Recently a person reached out from the letgo app and after talking back and forth for a bit, they had a cash offer. They claimed to be a house flipper. They haven’t seen my house other than online photos. I do have a realtor, which I explained to them, but they’re speaking with me directly. Obviously they’d need to go through a realtor to do this properly I assume. Is this just a scam? I’m very leery of this cash offer for lots of reasons but I just don’t see what they’d be gaining out of it. I tried telling my realtor about the situation but haven’t been able to get a hold of her yet. Thoughts?

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61 Answers

rebbel's avatar

I have never once sold a house (only bought one once), but with matters like these, which concern large amounts of money, I would definitely hold them off until you do get hold of your realtor.
I would say to myself, regarding someone that offers to pay cash for such thing as my house: “What could possibly go wrong?”
Lots.

ItalianPrincess1217's avatar

@rebbel I agree. I wish she would return my calls so I could figure this out in case it happens to be legitimate.

rebbel's avatar

If they want the house so desperately, they’ll wait until you get back to them (then, prepared and wiser).

ItalianPrincess1217's avatar

@rebbel The last thing they said was “Keep me updated, I want to close ASAP”. So again, the urgency makes me uneasy.

canidmajor's avatar

I have bought three and sold two houses in my time, and I absolutely wouldn’t trust this situation. Maybe I’m a futsy old prude, but I believe that this quicky offer thing is just a bit too odd.

Of course, I prefer the realtor to do all the work.

rebbel's avatar

They sound (from that sentence alone already) like they want it very much (which is in itself is a weird negotiation tactic, I would think), so again, tell them that you will get back to them later.
If this is a bonafide transaction in the make, they can easily wait a bit, and it would make your position strong.
Actually, I would want to tell you that you can lean back and relax.
Even if this all leads to nothing (with these potential buyers) it can be a sign that your house is desirable.
Relax.

chyna's avatar

You’ve signed on with a realtor. You can’t go around the realtor and sell your house. That would be unethical and taking her commission away from her.
Don’t talk to the other party again. Give the information to your realtor and let her handle it from here out.
I don’t know if it’s a scam, but this is a good reason to have a realtor and a lawyer for closing.

janbb's avatar

Tell them to show your realtor the money.

chyna's avatar

@janbb has been watching Tom Cruise movies again. :-)

ItalianPrincess1217's avatar

@chyna Right, and I’m aware of that. I know what my contract states but I do have the right to speak to people about buying my home and then send them in my realtor’s direction. I’m not taking away her commission or anything of the sort.

ItalianPrincess1217's avatar

@rebbel Very good point. No sense in worrying about it. If they want it that bad and they’re legitimate, they’ll wait until my realtor responds.

rojo's avatar

I think cutting your realtor out of the equation might be against the contract agreement you both signed. Might check it out before making any rash moves.

That said, I have know someone who got a cash offer. Took the house off the market and three months later sold it to the same folks for the cash but seems to me there was a lot of faith having to take place to make this work, not to mention the morality of the act was suspect IMO.

ItalianPrincess1217's avatar

Not sure what people are misunderstanding about my question. As stated, I have a realtor and have told the buyer I have a realtor. I never implied cutting the realtor out of the equation. In fact I said I tried reaching out to her to inform her of the offer. There is no way of going around my realtor. There is a contract. I cannot sell my house without her help. I’m not sure whether the buyer needs a realtor but they do need to go through mine if they want to buy my house.

I simply wanted to know if this kind of thing seems like a scam. Do people usually go around with cash offers and speak directly to the buyer?

My realtor called me back and said it could be legitimate, she’s not sure. She said if they seem very serious direct them to her. They also apparently need a 10% deposit if they’re going to make a cash offer.

So let’s see how serious this buyer is or whether it’s a strange sort of scam after all.

MollyMcGuire's avatar

This is why you pay a Realtor. DO NOT SPEAK WITH PROSPECTIVE BUYERS. They will ask you a question and if you answer you may verbally contract with them or assume some kind of liability. They may be recording conversations too. The big thing here is that people who flip houses know that they are supposed to deal with your realtor. The fact that they contacted you shows poor faith to me. AND why are advertising your house when you have contracted with a realtor. Owners can really mess up a negotiation. Let the pro do their job or end your contract and try to sell it yourself. Doing both is not smart.

ItalianPrincess1217's avatar

@MollyMcGuire I shared the listing that my realtor posted on her sites. She knows about it and is very okay with this. It’s surprising to me that everyone seems to think I have no rights to speak to others about MY OWN HOUSE. In the end, this is still my house and I decide what offer is accepted or whether we even sell it. The realtor works for me. She’s getting commission regardless so if I find a buyer and bring them to her, this is a non issue. I didn’t want opinions on whether I should share the listing or not, because this is VERY COMMON to do. I wanted opinions on whether this buyer sounded particularly shady or not.

YARNLADY's avatar

As long as the realtor gets her share of the sale, it is probably legit.

ItalianPrincess1217's avatar

Would there be any reason a buyer might want to avoid going through a realtor? Buyers don’t usually have to pay a percentage to buy a house, correct? As the seller, 6% of the sale goes to the realtor but would there be a reason someone might not want to use a realtor to buy a house?

Patty_Melt's avatar

I think you should check the history of the house. Maybe who the builder was makes it more desirable than you know.
Maybe the layout, or something else makes it a collectable.
Sometimes it can be a specific aspect of the house, like the fireplace.
There are lots of homes that are collectable for one reason or another, and sometimes they change hands two or three times before anyone catches on.

ItalianPrincess1217's avatar

@Patty_Melt Thank you! I hadn’t thought of that.

ItalianPrincess1217's avatar

So, this person is apparently going to write up an offer to my realtor and send it over. I still feel like this has to be too good to be true.

chyna's avatar

It sounds like it is happening!

janbb's avatar

In my area, there are a certain group of buyers who were known for knocking on doors with cash in a suitcase. I wouldn’t dismiss it as not legit as long as they go through the realtor. If they want it they will, they might have just been looking to expedite things or cut you down on the asking price if you didn’t have to pay a commission. Let it play itself out.

ItalianPrincess1217's avatar

@janbb They didn’t seem to have an issue once I said to contact the realtor from here on out. They said they’d be sending over the offer. So we’ll see how it goes from here!

On a side note, can they send the offer to my agent’s email? Because that’s where they’re sending the paperwork. Is that normal?

janbb's avatar

Yes, I would think that’s fine. If it’s an attachment, she can print out a hard copy.

MollyMcGuire's avatar

I didn’t mention rights; I’m talking about being smart. I’m sure your agent would be thrilled for you to sell your house for her…........she’s getting paid regardless.

ARE_you_kidding_me's avatar

Its all got to go through a title agency anyway. Until they actually have the cash the transation cannot be processed.

2davidc8's avatar

@ItalianPrincess1217 To answer your question in one of your comments above, the buyer knows that he/she won’t be paying the agent’s commission. As you noted, you, the seller, typically pays the whole 6% commission. But the buyer might be hoping that you may be willing to bypass your listing agent and split the commission with you. That is, you lower the sale price by 3%, and you also keep 3%. But as others have noted, this is unethical, and would probably violate the agreement you have with your agent.
Now, the fact that they’re willing to work with your agent after all probably means they’re serious. Just make sure they show your agent the money. That is, actual bank statements with enough cash on hand.

JLeslie's avatar

I was a realtor. I’m still licensed with the state, but not a realtor anymore.

Sounds like I came to this thread late, so I don’t think you really need any advice from me. Looks like the deal is happening. That’s great! It’s the perfect buyer, you didn’t even need to tidy up, grab your children, and clear out of the house for an hour to show it. Lol. I hope it worked out.

@2davidc8 There is no bipassing the realtor. 99% of listing contracts are exclusive, which means the realtor gets paid no matter what. House flippers know that. I highly doubt the buyer was trying to go around the realtor. It sound like the OP had put her own contact number when marketing her house on social media maybe.

You can have a contract with the realtor stipulating that if there is no realtor on the buyer side then the seller pays a lower commission, but most sellers don’t try to negotiate that. They don’t know they can do it. Some realtors won’t do it.

@MollyMcGuire In Florida the law is extremely clear that there is no such thing as a verbal contract regarding real estate sales. I’m guess most states it’s the same. All real estate sales must be in writing, and verbal agreements mean zero from a legal point of view.

ItalianPrincess1217's avatar

@JLeslie Last I heard the buyer said he was sending over an offer to my realtor. I haven’t heard from her yet. I’m cautiously optimistic.

JLeslie's avatar

^^Sounds good. Meanwhile, you still have the house on the market, so for now try not to get too anxious about the whole thing.

ItalianPrincess1217's avatar

@JLeslie It’s so hard! I can feel myself obsessing over it already. I keep wondering why my realtor hasn’t reached out. I’m going over all the scenarios of how this could be play out to be a scam. I don’t like the waiting game and being kept in the dark. If he didn’t email her by now I’m guessing he’s not going to and something strange is going on with the whole thing.

Jaxk's avatar

I’ve bought and sold many houses both with and without a realtor. If the buyer is willing to put up ‘Earnest Money’, it’s likely legit. Typically half the commission goes to the buying agent and half to the selling agent. There is no buying agent so that commission is up for grabs. Your agent may want to keep it herself but you need to talk about it with her. A sense of urgency on the buyers part does not indicate a scam. If the buy is flipping houses part of the deal is to make the it happen quickly. It sounds like things are moving but you are impatient. Your realtor should be more responsive but you’re locked in now so just keep bugging her.

ItalianPrincess1217's avatar

Still no call back from my realtor. I’m frustrated at this point. Am I able to ask the buyer to forward me a copy of the offer to see if there really was an offer at all? Or is that not allowed because I’m not an agent?

chyna's avatar

Be patient. It hasn’t even been 24 hours yet.

ItalianPrincess1217's avatar

@chyna I know. This has just been a recurring thing with her so I’m going into this already frustrated I guess.

janbb's avatar

Don’t ask the prospective buyer to send you a copy of the offer; that’s just not done.

ItalianPrincess1217's avatar

@janbb Okay, thank you. I didn’t think so, but wasn’t sure.

ItalianPrincess1217's avatar

My realtor called. The buyer did in fact send an offer over! She responded requesting proof of funds and a 10% deposit. I wasn’t aware there was a 10% down payment required to buy a home with cash. I can understand the proof of funds but why the 10% deposit? Just curious.

chyna's avatar

To ensure the buyer is truly interested. Most people would not risk losing 10% or really any amount of earnest money unless they really wanted to buy the house.

JLeslie's avatar

It is hard! I would be obsessing also.

As far as the deposit/escrow money, it can be any amount the seller and buyer agree on. It’s different in different markets. In my experience 10% is high on a resale, but if you get it that’s great. If he offers 5% I think that’s adequate. You would want it to cover (more or less) your mortgage/ins/tax for a couple of months, so if the deal falls through you’re not out what you paid to maintain the house while waiting for the sale to close.

Sometimes it’s just a few thousand dollars, and an addition deposit is given after the inspection. I’m assuming it will be an As Is contract which means usually that they can cancel without penalty once the inspection is done.

Patty_Melt's avatar

Sounds like time to throw a party!

janbb's avatar

A 10% down payment isn’t unusual to ask from any buyer. A smaller amount of earnest money is usually asked for ith the offer. It sounds like your realtor is protecting your interests – I wouldn’t second guess it.

ItalianPrincess1217's avatar

@JLeslie That makes sense! If the buyer counters with a lesser percentage, I hope the realtor let’s us know and doesn’t automatically decline the offer. I felt 10% sounded a bit high but she had already sent that request. I’d be willing to accept a little less.

Dutchess_III's avatar

Trust your instincts. Besides, you probably signed a contract with your realtor so you could be breaking the law by going around her.

2davidc8's avatar

@JLeslie I didn’t say to bypass the realtor. I said that the buyer may have initially tried to get you to bypass the realtor (because many buyers don’t know much about real estate contracts), but that to do this is not only unethical but also probably against the provisions in your listing agreement. Please read my post more carefully.

MollyMcGuire's avatar

@JLeslie Don’t put words in other people’s mouths. I said nothing about a verbal real estate contract.

canidmajor's avatar

@MollyMcGuire, yes, you did, in your first post. ”DO NOT SPEAK WITH PROSPECTIVE BUYERS. They will ask you a question and if you answer you may verbally contract with them or assume some kind of liability. They may be recording conversations too.”

JLeslie's avatar

Nothing wrong with your realtor trying to get the 10% escrow money for you, my only point was if the buyer comes back with less don’t feel taken advantage of, if it’s a reasonable amount to you. Don’t stress yourself about negotiating that point if you’re already going to be negotiating something else like price or closing date. You don’t want too many moving parts in the negotiating, it gets overly stressful.

I’m not diminishing the importance of the escrow money, deals do fall through and you’ll want some protection. Also, your contract might say that you pay your realtor some money even if the deal doesn’t close, depending on the reason for the deal not closing. I’ve never known a realtor to actually take that money, but I’m sure it happens.

@2davidc8 The buyer might not have known there was a realtor, because it might not have been on the original post he saw on social media, but that’s not trying to bypass the Reator, he just wouldn’t have known there is a realtor. House flippers who buy sight unseen usually are experienced, they know there is no such thing as going around the realtor.

@MollyMcGuire I think @canidmajor made the point. Maybe you meant to say something different than what you wrote.

ItalianPrincess1217's avatar

@JLeslie Right, and I agree with you. I think it’s a good starting point but like you said, if the buyer comes back with a lesser offer for deposit, that’s okay too.

@2davuidc8 I don’t think the buyer ever tried to bypass the realtor. I’m not sure I mentioned my realtor in my original post but I assumed that since I included the MLS number in it, anyone looking at the information would just type that in on a realty site and see that I had a realtor and contact her directly. The buyer probably didn’t do that. He only looked at my post and photos and assumed I personally was selling it. Once I said contact my realtor from here on out he was absolutely fine with it and sent an offer shortly afterwards directly to her.

janbb's avatar

There isn’t usually negotiation on the deposit and if the buyer has cash on hand that shouldn’t be a sticking point.

JLeslie's avatar

@janbb It probably won’t be a sticking point, I’m just saying it’s not worth making it a sticking point. The only time I’ve ever put 10% was when I was doing a house with a builder. If it’s a very low priced home, then I could see 10%, but I would just use a money number instead and not even think in terms of a percentage in that case. Like a $125k house I’d probably just look for $5k as a deposit. When someone buys a $500k house in the states I’ve lived in I don’t usually see a $50k deposit. Not on the initial deposit anyway, if there is going to be two. Often there is only one, I’m not saying two escrow amounts is more common, it’s done both ways.

MollyMcGuire's avatar

@ canidmajor Can you read? I said she might end up in a verbal contract or assume liability….....not for buying the real estate. Scammers are manipulative. Life is great. And people like to talk more than they listen, or in this case, read. Details are important.

MollyMcGuire's avatar

@JLeslie I think you should try again

canidmajor's avatar

Oh, gee, my bad, @MollyMcGuire. To which potential verbal contract did you refer in that real East age specific post?
(Can you hear my eyes rolling?)

JLeslie's avatar

@MollyMcGuire What liability? I don’t understand what you mean by liability.

Dutchess_III's avatar

If she broke a contract somehow, she would be liable.

JLeslie's avatar

Oh.

Well, since there is no verbal contract in real estate that’s not an issue. Unless NY is different than most states. Doubtful, but not impossible.

ItalianPrincess1217's avatar

Correct @JLeslie, there is no such thing as a verbal contract in real estate in NY.

@MollyMcGuire There was only ever communication between the buyer and I through an app messenging system. This is an app where you can use your real name or make up any name/username you want. So there is no chance I could have entered into a contract with a person who didn’t even know my real name. All I ever did was discuss a property and give my realtor’s name, number, and contact information. I could have technically been anyone. The buyer really had no way of proving who I was. This is another reason I was concerned it was a scam. This buyer could have also been pretending to be anyone. Luckily they were legitimate, at least it seems.

Patty_Melt's avatar

I still think you should check the history of the house.
Maybe someone lived there as a child who is now famous, and wants to buy it out of emotional ties?

ItalianPrincess1217's avatar

@Patty_Melt No, it was in my husband’s family before we bought it. It turns out the buyer is actually with a group who buys houses and flips them. I thought this was odd because the house was already renovated but hey, if they want to buy it and renovate it again, that’s fine by me!

Patty_Melt's avatar

Sounds like you should start packing. :-)

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