It wasn’t long ago that the words “cash offer” were the best words for a seller and their agent – cash is king has been a mantra in real estate for many, many years. Things have changed recently and now a cash buyer isn’t the holy grail for real estate agents it once was. Unfortunately, scam artists have found ways to beat the system and use cash offers as a way of pulling one over on the public. We’ve seen several attempts at these scams and Kimberly Howell even appeared on a FOX News special report about these scams that, according to police, have skyrocketed in recent months in San Antonio.
The idea of the scams is to take possession of the property without actually paying for it. Sounds impossible, but sadly, it’s not. Scam artists will then either occupy the property and work to avoid eviction (which is much harder than it should be, particularly in the case of a scam) or they will attempt to flip the property quickly in another cash deal. By selling it again for cash, they avoid most of the red flags that would be brought up by title and lenders and can earn a quick buck (if they paid nothing they can still sell the property at cut rate prices and it’s still 100% profit for them).
What does this mean for cash buyers?
While it will frustrate many cash buyers, they are now facing more scrutiny than before. From proof of funds to requirements that their proceeds are wired to title before they’re allowed to close, steps are necessary to protect all parties in the transaction. This can be off-putting to some cash buyers, particularly those with more than enough money to buy a property outright – experience shows that many people who have a large net worth do not often like to show their hand or spell out their finances. Unfortunately, with these scams being played out in low and high priced housing, there is little sellers and their agents can do other than be vigilant and make sure they do their homework before accepting a cash offer. We at Kimberly Howell Properties have put several systems into place to help safeguard our clients, particularly during cash transactions.
As agents, we work hand in hand with agents from other companies when any type of fraud or scam is suspected. Our office spends time educating our agents on the scams and ways to detect them so that our clients are guarded against them. The scammers will always come up with a new trick or scheme, so we consistently watch and learn, so that we may prevent them from happening in the future. Cash is king, but only with the right precautions.
image courtesy of jkbrooks85