Now before we go any farther, I feel the need to that this article is only referring to unethical or scam companies. There are many legitimate House Buying companies who help a lot of people get out of bad situations.
This is how a scammers business works in a nutshell. They buy houses quickly and for cash. To do this they usually have someone else lined up to resell the house to. That does not sound so bad though.
Its how they make their profit which is questionable. Its made from the equity in your house. You see, more often than not, they only offer enough to cover your dept. They start by coming to see the house, they walk through and talk with you. They’ll try to get you to tell them how much you own on the house, even though its none of their business. They do this to convince you to trust them, that they want to help you.
The only one they’re looking out for is themselves, this is their business and they do it by convincing you your house is not going to sell any other way, that its in needs repairs. You’re not going to benefit from this deal.
It gets worse. No only will they expect you to take their offer, depending on how they operate, you might end up not having enough money to pay your outstanding mortgage once you do sell.
The worst companies will try to get you to sign over your deed, you might think your house is sold but its not because you still have a mortgage on it. Now they control your house and you’re stuck with a mortgage to pay. Avoid any deal that does not involve full cash payment upfront, or through escrow.
If you are wanting to use a We Buy Houses service, be sure to read everything before signing, get all agreements in writing and ask questions about anything you don’t understand. If you need help talk to bank, also investigate the company by calling your state government to find out about any complaints by previous customers. Rule #1, don’t believe everything they tell you, follow this advice and you’ll be safer and happier.
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