SELLER BEWARE! SELL YOUR HOME FOR CASH!

Predatory practices are a concern for homeowners looking to sell their property for cash. You’ve seen the signs on the side of the road or on the internet “SELL YOUR HOME FOR CASH!”  

What are these companies doing? 

Do offers like this really work? Yes and No. 

Cash Investors make money by purchasing properties from homeowners below market value and either flipping or redeveloping the properties. They generally pay a lower price for the property, sometimes as little as 50% of the fair market value. In some cases, they also deduct a convenience fee of 10-20% from the offer price to account for the fact that they are buying the property as-is, with no Realtor fees or closing costs.  Some companies offer a “vanity offer” in cold-hard cash and make the offer sight-unseen. This can be tempting for sellers, but it is important to be cautious of these offers as they may not reflect the actual value of the property.  

Predatory home buyers may also coerce sellers into accepting unfavorable contract terms or making changes to signed purchase agreements to benefit themselves. Unlike licensed Real Estate agents, these businesses do not have a fiduciary obligation to the homeowner, often times they are not licensed and do not have the same ethical and legal obligations as a licensed Realtor. There is NO regulation, and they are NOT working in your best interest.

A licensed real estate agent is different. They have legal obligations, contractual obligations, ethical obligations, and they are heavily regulated. 

A Pennsylvania licensed real estate agent providing you with real estate services owes you the following duties:

• Exercise reasonable professional skill and care. 

• Present, in a reasonable period, all offers, counteroffers, notices, and communications to and from the parties in writing. 

• Comply with Real Estate Seller Disclosure Act.

• Account for escrow and deposit funds.

• Disclose all conflicts of interest in a reasonably practicable period of time.

• Provide assistance with document preparation and advise the consumer regarding compliance with laws pertaining to real estate transactions.

• Advise the consumer to seek expert advice on matters about the transaction that are beyond the licensee's expertise.

• Keep the consumer informed about the transaction and the tasks to be completed.

• Disclose financial interest in a service, such as financial, title transfer and preparation services, insurance, construction, repair or inspection, at the time service is recommended or the first time the licensee learns that the service will be used.

Before you disclose any information to a licensee, be advised that unless you select an agency relationship the licensee is NOT REPRESENTING YOU. A business relationship of any kind will NOT be presumed but must be established between the consumer and the licensee- in writing. 

It is important for homeowners to be aware of predatory practices.  Properly research and vet potential buyers and companies before entering into any agreements. Working with a reputable real estate agent or attorney can help you ensure that the selling process is fair and protects YOUR best interests. 

Getting multiple opinions about the value of your property is FREE! Choose a professional that represents you!

Gia Albanowski, Realtor