Selling a house can be a frustrating experience. First, there’s the time factor—it takes an average of about two months to sell a house, and can take much longer depending on the market you’re in and other factors. Second, there’s the price—the market might be hot, but nearly a third of home sellers wind up reducing their asking price. If you’re counting on getting a certain amount out of your home sale and the market just won’t cooperate, selling your home can become a headache.
It can make you contemplate some bad ideas like selling to an iBuyer or responding to one of those unsolicited “we buy houses” operations. But even if you know better than to give in to those intrusive thoughts, you can still be scammed when selling your house, especially when someone makes an offer over your asking price. The market is hot (58% of real estate professionals say their clients have offered more than asking price in order to beat out competition for a house), but sometimes a highball offer on your house is a tactic to blind you to a real estate scam that can cost you a lot of money.
You’ve been trying to sell your house, and you’re starting to despair, when you get a call from someone who offers you a great price, possibly even over your asking price. All you have to do is pay them a small administrative fee to get the paperwork rolling. There are a lot of fees involved in selling a house, so this might not immediately set off alarms, but it should—because it’s very likely that this is a scam designed to get that fee and then vanish from your life. The high offer price is used to dazzle you, but when you call to find out when you’ll receive the formal offer you’ll discover that the “buyer” has disappeared.
This one’s a bit complicated: You get an offer over your asking price, but it comes with a lot of contingencies, including that your home appraises for more than the offer. The buyer gets a loan for the full amount of the home’s appraised value, pays for the house, and asks you to kick back the difference between the appraisal and the sale price, or might even offer to split that extra cash with you as an incentive.
For example, you get an offer to buy your house for $300,000 contingent on an appraisal for $350,000. Assuming you can get that valuation, the buyer gets a loan for the $350,000 and officially buys the house at that price, but asks you to send them back $50,000 (sometimes less the closing costs). This is fraud, plain and simple, as the loan is meant to be based on the sale price of the home. Home sellers might not see a problem because they’re getting their money, but if you sign off on a fraudulent loan you could find yourself in a heap of trouble down the line.
One of the clearest signs that you’re being scammed in a wide range of financial transactions is the presence of a cashier’s check. While these checks have a use, they’re also frequently used in scams because of the lag between depositing them in your bank account and the funds being vetted and cleared—the funds in cashier’s checks must be available within 24 hours, so the deposit looks like it has cleared and hit your account. But the check itself can take several days or more to make its way through the system.
The over-asking home buying scam using a cashier’s check operates similarly to all other cashier's check scams: You’re contacted by an interested party who loves your house so much they want to pay more than asking for it and want to lock down the deal by sending you a cashier’s check of earnest money. You get the (fake) check and it’s made out for more than you’d agreed to—if they promised you a $10,000 down payment, they send you $15,000. The buyer claims it was an accident, and asks that you simply return the extra funds. When their fake check bounces, the bank will remove that $15,000 from your account—and you will never see your $5,000 refund again.
A key sign that an offer on your house is a scam designed to extract money from you is a deluge of contacts and information. Scammers will often send you reams of financial statements, letters from their bank, and other financial information to prove to you that they have the money on hand to buy your home—often information you wouldn’t have thought to ask for in the first place, and information that comes directly from them instead of a bank or real estate professional. They combine this with a flurry of texts, phone calls, and emails that stress the urgency of the sale.
All of this is designed to accomplish two things: stop you from doing actual due diligence, because they’ve already given you all the information you need, and to pressure you into just going forward with a sketchy deal.
In a house sale the buyer and seller traditionally pay for different services and fees. If a potential buyer who has dangled an over-asking offer in front of you suggests that you should pay for anything out of the ordinary, be suspicious.
For example, the buyer traditionally pays for a home inspection if they want one. If the buyer insists that you should pay for the inspector (who they have hired), be careful: After paying the inspector’s fee, both the buyer and the inspector may vanish into the wind. If the seller is eager to buy your house for more than you’re asking, insisting that you cover small fees like this should be a red flag. Scammers count on the sunk costs fallacy to keep you on the hook because you don’t want to lose the offer, so you’re more willing than usual to ignore your gut instincts.
