Buzz
Selling a home can be a stressful ordeal. The first challenge is the time—it typically takes around two months to sell a home, but this duration could extend even further depending on the market and various circumstances. Another hurdle is the price; even in a hot market, nearly a third of sellers find themselves lowering their asking price. If you're hoping to sell for a specific amount, but the market isn't on your side, the process can quickly become overwhelming.
You might begin to consider options like selling to an iBuyer or replying to one of those unsolicited “we buy houses” offers. However, even if you resist these temptations, a scam could still catch you off guard when you're selling your house, particularly when someone makes an offer above your asking price. With the market being competitive (58% of real estate professionals report their clients bidding over the asking price to secure a property), some inflated offers could be an attempt to deceive you into a real estate scam that might result in substantial losses.
Introducing 'administrative fees'
You’ve been trying to sell your home, feeling frustrated, when suddenly a call comes in from someone offering a deal that seems too good to pass up—maybe even more than what you were asking. All they ask is that you pay a small administrative fee to get the process started. With all the fees typically involved in selling a house, it might not immediately raise any red flags, but it should—because this is likely a scam designed to collect that fee and then vanish without a trace. The high offer is just a trick to lure you in, and when you follow up to check on the offer, you’ll find that the so-called buyer has disappeared.
Requesting cash back
This scenario can be a bit tricky: You receive an offer above your asking price, but with multiple contingencies, one of which requires your home to be appraised for more than the offer. The buyer secures a loan for the appraised amount, purchases the house, and then asks you to return the difference between the appraised value and the agreed-upon sale price, or even suggests splitting that additional money as an incentive.
For instance, you might get an offer to sell your home for $300,000, contingent on the appraisal being $350,000. If the appraisal holds up, the buyer secures a loan for the $350,000 and purchases the home at that price, but then asks you to send them back $50,000 (sometimes minus closing costs). This is outright fraud, as the loan is supposed to be based on the sale price, not an inflated appraisal. While the seller may think they’re getting paid, agreeing to a fraudulent loan could lead to significant legal issues down the road.
Receiving a cashier’s check
One of the most obvious indicators that you're being taken advantage of in a variety of financial dealings is the use of a cashier’s check. While cashier’s checks do serve legitimate purposes, they are often exploited in scams due to the delay in verifying the funds. Cashier’s checks are supposed to have the funds available within 24 hours, making it seem like the deposit has been processed and the money is in your account. However, the check itself may take several days or even longer to clear through the banking system.
The scam involving a home sale with a cashier’s check follows the same pattern as other similar scams: You’re approached by someone who expresses a strong interest in buying your house for more than the listed price, and they offer to secure the deal by sending a cashier’s check for earnest money. The check arrives, but it’s for more than what was agreed upon—if the agreed-down payment was $10,000, the check is for $15,000. They claim it was a mistake and ask you to send the extra funds back. When the fraudulent check bounces, the bank will reverse the $15,000 from your account, and you’ll never see the $5,000 you returned.
Overloading you with excessive details
A major warning sign that an offer on your home might be a scam is an overwhelming flood of communications and documents. Scammers often bombard you with a large volume of financial statements, letters from their bank, and other paperwork meant to convince you that they are financially capable of purchasing your property—often sending you information you never even thought to request, and directly from them instead of through a trusted bank or real estate professional. Along with this, you will receive numerous texts, calls, and emails stressing how urgent the sale is.
This tactic serves two purposes: first, to prevent you from performing proper due diligence since they’ve already provided you with all the necessary details, and second, to pressure you into moving forward with a deal that’s inherently suspicious.
Unexpected charges
When selling a home, the buyer and seller typically cover separate fees and services. However, if a potential buyer, who has made a tempting over-asking offer, suggests that you should pay for anything unusual, be cautious.
For instance, the buyer is generally responsible for paying for a home inspection if they choose to have one. If the buyer insists that you should cover the cost of the inspector (whom they hired), be wary: After you pay the inspector’s fee, both the buyer and the inspector could disappear without a trace. If the buyer is eager to purchase your home for more than the asking price but demands that you pay small fees like this, it could be a warning sign. Scammers often rely on the sunk cost fallacy to manipulate you into staying engaged, making you reluctant to walk away from a good offer. This tactic plays on your desire to avoid losing the deal, causing you to ignore your instincts.
