“I want to buy your house.” It’s a text message that can feel like it’s out of the blue, and the offer of cash can be enticing. But how do you know if it’s legitimate or a scam?

You may not know who is on the other end of that text, but if you’re trying to sell your house, the message might seem like perfect timing. The sender could claim to be a private buyer, a real estate investor, or someone just looking to move into your neighborhood. They may even mention your actual address or know your name. It’s convincing, but the big question is: Is it legit?

Are “We Buy Houses” Texts Legitimate?

When it comes to unsolicited offers, there are definitely legitimate cash buyers out there — but there are also scammers. It’s important to know how to distinguish between the two. According to Eric J. Troutman, founding partner of the law firm Troutman Amin in Irvine, California, there are indeed scammers who will pretend to be anyone to obtain your information. On the other hand, some legitimate investors do use cold texting as a strategy to connect with homeowners who may be interested in selling.

Investors are buying homes at record levels, with nearly 15% of all house purchases in the first quarter of 2024 coming from private equity and commercial investors, according to Realtor.com. As a result, some of those unsolicited texts could be from real investors looking for properties to buy.

How “We Buy Houses” Companies Work

“We buy houses” companies, also known as cash home buyers, specialize in buying homes quickly and efficiently, usually by offering cash. Their primary aim is to help homeowners sell their houses fast, especially in situations where traditional real estate methods may not be practical. These companies often buy homes “as-is,” which means you won’t need to make any repairs or renovations.

Legitimate cash buyers, like City Lights Home Buyers, provide a smooth, fast process with benefits like covering closing costs and offering flexible closing dates. When you work with trusted companies, selling your house for cash can be a great solution, especially if you need to sell fast.

However, not all cash buyers operate ethically. Scammers can make tempting offers, but recognizing the red flags is crucial to protecting yourself.

Real Estate Agents and Cold Texting

Real estate agents also use cold texting to reach potential sellers. “Agents are constantly sending out text messages, cold call solicitations, as well as legitimate messages to their prospects,” Troutman explains. While some of these texts are legal, many can cross into illegal territory if they’re sent from automated systems without your consent.

Under the Telephone Consumer Protection Act (TCPA), businesses must have your consent to send automated marketing texts to your mobile phone. If you haven’t provided this consent, the message could be illegal. However, if the text comes from a manual system (meaning it’s one-on-one communication), it may still be legal even if unsolicited.

Spotting a Scam: Red Flags

When you receive an unsolicited text from someone offering to buy your house, how do you know whether it’s legitimate or a scam? Here are some tell-tale signs to watch out for:

1. Lack of Business Information

If the person contacting you doesn’t provide basic business information like their company’s name, phone number, or physical address, proceed with caution. Scammers often hide behind fake websites or use minimal information to appear credible. Always do a background check on the company. Look them up on the Better Business Bureau (BBB) to check for reviews and complaints. City Lights Home Buyers is BBB accredited and a proud member of the Rental Property Owners Association (RPOA), ensuring transparency and credibility.

2. No Proof of Funds

Legitimate cash buyers will always have proof of funds and be willing to show you their ability to purchase your property. If a buyer refuses to show proof, it’s a red flag. At City Lights Home Buyers, we are transparent about our process and provide proof of funds to ensure sellers feel confident in the transaction.

3. Upfront Payment Requests

Scammers may ask for upfront payments or offer to “wire money to your bank account” before you’ve signed any agreement. Legitimate cash buyers don’t ask for payment from you before closing the deal. If you’re asked to transfer money or sign over your deed early, walk away immediately.

4. Unprofessional Behavior

If a buyer seems overly eager or rushes you through the process without taking the time to inspect your home, it’s a sign of a potential scam. Legitimate investors want to understand your property and provide a fair offer. Rushed behavior, combined with a lack of information about your property, is a clear warning sign. City Lights Home Buyers takes the time to assess each property and make sure the offer is based on the home’s actual condition.

5. Unrealistic Offers

While a cash buyer’s offer may be lower than the full market value (typically around 70%), an extremely low-ball offer or an offer that’s far too high could indicate a scam. A legitimate buyer will make a reasonable offer based on the property’s condition and market value.

Common Real Estate Scams to Watch Out For

Here are a few common scams in the real estate world:

1. The No Cash Scam

In this scam, the buyer claims to have the funds to purchase your home but doesn’t actually have the money. After tying up your property with a contract, they disappear, leaving you with nothing. Always ask for proof of funds before moving forward.

2. The Rent-Back Scam

Scammers may ask you to sign over your deed before giving you the cash, offering to rent the property back to you. Once you’ve signed over the deed, the scammer owns your home, and you may never see your money.

3. Hidden Fees

Beware of hidden fees or last-minute costs that weren’t part of the initial agreement. Some scammers will try to add surprise service charges or other fees to the contract. Always read the contract carefully before signing and ask for clarification on any additional fees. City Lights Home Buyers operates with full transparency, with no hidden costs or surprise fees.

How to Protect Yourself

1. Verify the Buyer’s Identity: Always ask for business information, check reviews, and verify their identity online.
2. Proof of Funds: Legitimate buyers will be able to provide proof that they have the money to back up their offer.
3. Consult a Professional: If you’re unsure about an offer, consult a real estate attorney to help navigate the process.
4. Check the Contract: Make sure to review any contracts or agreements carefully before signing. If anything seems off, don’t hesitate to walk away.
5. Don’t Sign Over Deeds Early: Never sign over your property before receiving payment at closing.

Legitimate Cash Buyer Process: What to Expect

If you’re dealing with a legitimate buyer like City Lights Home Buyers, the process will be straightforward and transparent. Here’s what it should look like:

1. Initial Contact: You’ll be asked about the property and why you’re selling.
2. Property Assessment: The buyer will inspect your home in person to determine its value.
3. Fair Cash Offer: You’ll receive an offer based on the home’s condition and the local market.
4. Closing: Once the offer is accepted, you’ll set a closing date and receive payment in full.

City Lights Home Buyers – Your Trusted Cash Buyer

City Lights Home Buyers is a trusted, legitimate cash homebuyer based in Grand Rapids, MI. We specialize in purchasing homes across West Michigan, including Muskegon. When you work with us, you can expect:

• A fair cash offer based on the true value of your home.
• No hidden fees or last-minute charges.
• Fast closings that fit your schedule.
• Full transparency throughout the process.
• Proof of funds and a secure closing with a real estate attorney.

We are also BBB accredited and a proud member of the RPOA. Whether you’re looking to sell your house fast or need help navigating your options, City Lights Home Buyers is here to provide a smooth and hassle-free experience.

Contact City Lights Home Buyers Today

If you’ve received an unsolicited text or are interested in selling your home for cash, reach out to City Lights Home Buyers. We’re ready to offer you a fair price and a seamless process.

Call us today at 616-202-3933 or email Caleb@CityLightsGrandRapids.com. Visit our website at City Lights Rentals for more information.