Tips to Prevent You from Falling Victim
Verify how many years the company has been an active business. Tip: Seasoned Real Estate Investors have a history & should be able to prove it to you easily on short notice. Check with the state business licensing boards in Oregon and in Washington.
How many current jobs (houses) and specific addresses?Tip: They should be able to give you at least 3-5 or more specific addresses they are currently working on! We Suggest you verify the ownership of the addresses to verify they do own them. (if you are unsure how to do that we are happy to assist you)
Look for public reviews via internet.Tip: Search them out on Google/Yahoo/Bing and see if there is any positive news on them. Remember no news is = bad news!
Tip: Verify that any reviews/testimonials have first & last names (which are real people) There are a lot of people who fake their own testimonials by just using a first name or first initial and last name. Google/Bing/Yahoo reviews, Facebook, and Better Business Bureau reviews are better reviews as they are a lot harder to fake. Verify our reviews here:
Ask for proof of funds.Tip: A real buyer is able to prove that they have the cash to close your sale -if they cannot show you proof of funds then stay away.
Earnest money amount: Make your potential buyer put up a minimum of 1% of the sales price or at least $3,000.00 or more as earnest money.Tip: If your buyer intends to close on your house, $3,000 is nothing. Anyone putting up less earnest money than this amount is not a real buyer and is not vesting anything into your sale and will more than likely walk away from the deal. Remember the more earnest money they put up, the more reassurance you have the buyer intends to close.
Tip: It’s very common for buyers to release earnest money to the seller once the clean title is established. Ask your buyer if they are willing to release this money to you ahead of the actual closing date. Anyone who is serious about closing on your sale will not have an issue doing this. If they shy away from doing this please be Leary of their intentions.
Any accreditations?Tip: Does your potential buyer carry a contractor license It’s required by Oregon law to flip houses!
Tip: What about Better Business Bureau accredited? Working with those buyers that are CCB and BBB accredited means that they are governed by these state agencies and they must keep in good standings- this means your working with a legitimate business. The more accreditations, the more legitimate they are.
Ask what title company/closing agent will your potential buyer be using- get the escrow agent contact info and verify that they do a lot of volume of business with this company, and verify that they do in fact use cash or financing to close with. Tip: A closing agent is a neutral party to the sale. However, they can verify if they have closed a lot of deals with the potential buyer and can tell you how fast they are able to close and even how they normally pay for the properties they purchase.
WARNING
Please DO NOT SIGN A CONTRACT with anyone until you feel 110% comfortable & have done your research on your potential buyer. Make sure they can perform. PDX Renovations gets calls all the time from people who have signed contracts with other buyers that cannot perform. Many sellers that are in this position will lose a lot of valuable time, lose proceeds, feel frustrated, and will normally lead to the deal falling through. If you find yourself in this position reach out to us and we will be happy to evaluate your contract and see if we can assist you in forcing the buyer to perform. We are happy to assist with this all the time and it’s 100% free of charge and there is no obligation to you, the seller.
