What are the risks of selling your home for cash?
Updated: Jan 6, 2019
These days it may seem like there are real estate investors everywhere advertising to "buy homes for cash" In this article I am going to cover how to properly vette and verify cash buyers in order to protect your best interest.
A simple google search will show you how easy it is for someone to get a fake proof of funds. Look out for proof of funds letters from (Transnational Funding on people ask us is "is it safe? is it a scam? who can I trust?" These are all valid concerns and questions. When evaluating cash buyers you need to be extremely careful and stand firm when negotiating and vetting these buyers. I have seen many people who have fallen victim to a scam because they blindly trusted an investor. Most investors are sharks, play dumb and are willing to lie to your face and tell you whatever you want to hear in order to buy your house fast.
Here are a few tips on how to deal with cash buyers
1. Request a copy of their "proof of funds"or "banking Statement"
2. Ask for proof of their last 3 properties they have bought for cash
3. Search their LLC or name on your local PVA and make sure they have bought or own investment properties
4. Ask for an attorney reference ( call and ask for a reference and how many homes they have bought for cash this year)
Pro Tip: make sure you research their proof of funds letter / cash approval. Many times investors can draw up a fake letter or pay for one online and have a cash approval for up to 1 million dollars in a matter of minutes.
A simple google search will show you how easy it is for someone to get a fake proof of funds. Look out for proof of funds letters from (Transnational Funding POF), ( COGO capital), (best transnational funding). These companies will give you a letter in minutes online. Do not trust these letters.
If you follow these tip you will be able to sort through the real and fake cash buyers.
What should I watch out for when selling my house for cash? Be very careful when an investor wants to take over your mortgage often called "buying a home subject to the existing mortgage" Often if you have little to no equity this a way investors can take over your problem property fast, but you need to understand you are still responsible for the mortgage even though the investor will be making the payments until the mortgage is paid off. In addition to this the deed will be transferred over the investor and you will still be responsible for the loan. If the lender finds out you have transferred the deed they have the right to trigger whats called "do not sell clause" in which they will call the loan/mortgage due immediately. This can create huge problems for you and the investor if they cannot afford to pay the loan in full.
Tips when an investor wants to buy your home "subject to the existing mortgage"
1. Verify the investor has done this before and ask for a reference from another home seller.
2. Verify the investor has been making payments on time and maintains the home.
3. Ask for a copy of their credit report to verify they are responsible and qualified to buy
4. Ask for a proof of funds that exceeds the loan balance on the mortgage (in case of "do not sell clause triggered)
5. Make it mandatory the investor pre-pay 3 months of payments upfront on day of closing
6. Write up an agreement / contract that states you can sue the investor if they fail to pay the mortgage payment / default on your loan.
If you follow all these tips you can safely sell your home "subject to" with no stress. If you're working with a qualified investor they should not have a problem complying with these terms and conditions. If you have any questions, or need access to more cash buyers in order to sell your house fast contact Rebel Home Offers. We have have access to thousands of vetted and verified cash buyers nationwide. If you don't want to deal with all the headaches Rebel Home Offers can get you multiple cash offers and you can pick the highest cash offer. Call Us today at 770.648.1750 or visit https://rebelhomeoffers.com