We Buy Houses scam

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We have seen the ads in the internet, paper, and posters in public places, "We Buy Houses".

Not long ago, a couple listed their home with a real estate company.  The real estate market had a number of listings of homes in the same neighbourhood, and generally, all the homes were well kept, and the listed homes were all competitively priced. 

The couple had made an offer on another home and were anxious to get a sale on their existing home.  They saw various postings for "We Buy Houses" from a variety of advertisers.  They called one, and were told the best price could be negotiated if no realtor was involved.  The couple called their realtor and said they wanted to cancel the listing agreement because there had not been any recent showings and the house had been on the market for some time.   The realtor recommended alternative marketing strategies, but the couple wanted to cancel.  The realtor took their request to his broker, and the brokerage cancelled the listing agreement.

The couple met with the "We Buy Houses" person.  That person said they liked the house and they negotiated a price. The person took out an agreement for purchase and sale agreement, and they completed it on the spot.  Possession was to be in 90 days.

90 days comes and goes.  Frustrated, the couple calls up their realtor and asks to restart their home for sale with the realtor.  At a different price and additional marketing strategy, the house has a sale.

Just before the closing date, the lawyer handling the sale calls to confirm that they have the documents, and including the mortgage payout, is a recently registered $15,000 cavaet to be paid from the sale proceeds.

"What cavaet?", the couple asks their lawyer.   It is a cavaet registered by the "We Buy Houses" person.

Now, the "We Buy Houses" person did not have a justifiable charge against the house.  But, the owners would need him to voluntarily discharge the cavaet- or, seek a court order to have the cavaet removed from their title.

But, who gets a civil action into court and a judgment decision within days?   The We Buy Homes person knew this, and knows the system.  

A negotiated settlement for half the cavaet value was made in order to close the deal.

MORAL OF THE STORY:   seek professional advice before entering into an offer of purchase to sell your home.  Use a realtor or a lawyer.

Not all "We Buy Houses" advertisers are scammers, But, you do need to protect yourself, don't you?