Small-time scams are fascinating to study, especially when you manage to elude them. Not long ago, I listed my house for sale “By Owner,” in order to save on commissions. If you are attempting such a sale, be sure to take your state of mind into account. This is especially true if you are looking for a property to buy while you work on getting the current house sold. You will be stressed, and it will be obvious to prospective buyers that you want to sell in something of a hurry, and to time the sale so as to make your purchase transaction go more smoothly.
Along comes The Perfect Buyer. You know that saying, if it sounds too good to be true, it probably is? This is very much the case here. Perfect Buyer will arrive at your home and tell you how wonderful it is. There will be very little fault-finding or criticism about the condition of your home. Little, if any haggling over price. The “buyer” is willing to accept your first selling price – how wonderful for you! You receive a check for earnest money and a signed purchase agreement.
In my particular case, Perfect Buyer was between homes, between jobs, having “a little trouble.” However, he had a friend! A smooth-talking, knowledgeable friend who claimed to “love to help people.” He assured me that with his assistance, Perfect Buyer would have no trouble meeting my sales price. However, for the next few weeks, cash would be tights, so would I be willing to pick up the cost of the appraisal, which generally ran about $300?
Since this expense is generally handled by the buyer, I asked if the $300 could be given back to me at closing. The Friend hesitated. “How many people would offer to buy your home for full price?” he asked. “Is $300 such a big thing to ask?” I almost gave in, but told him that no one was going to be “helping me with the cash outlay” when it was time to have my new purchase appraised. I said no.
That was the last I heard from Perfect Buyer or his Helpful Friend, and yes, the earnest money check bounced. We eventually did find a buyer who behaved in a much more typical fashion – haggling over the price and demanding we make repairs on the house before closing. It delayed our move by several months and the selling price had to come down, but in the end we had the peace of mind that comes with making a legitimate deal.
Let’s analyze this scam a bit. Imagine that Perfect Buyer and Helpful Friend (abbreviated to PB and HF) went out on the internet (or maybe even just out on the road) and made a note of every property being offered for sale by owner in a particular radius. Suppose they found 10. Suppose every one of those sellers was nave and gullible enough to think they’d made a dream deal, and allowed themselves to be guilt-tripped by HF about doing PB “a little favor” in return for a great sale price. Suppose also that the “appraiser” was either HF himself or a third party to the scam. 10 buyers hand $300 to a stranger they will never see again (the stranger or the money). That’s $3,000 to one crook, $1,500 to two, or $1,000 apiece to three. Keeping careful track of which homes they canvassed, these two guys could enrich themselves within a month or two, spending only on gas.
You can’t always protect yourself from ripoff artists, but you can know what’s out there, keep the phrase “too good to be true” in the forefront of your thoughts, and be extra careful in situations of stress, where a predator sees the perfect opportunity to take advantage.