20

Let me start by stating that I know the golden rule: "If you need to ask if it's a scam, it very likely is". In this scenario my "spidey-sense" is tingling, however I can't quite see how would this scam work, if it is one.

This is in Europe.

Lately I and other neighbours started finding flyers in our mailboxes. The text on it varies slightly with each one, although it's fairly simple to tell that they are all coming from the same source (very similar styling, format, phone numbers from the same operator etc.).

They all contain some variant of the following (variance in brackets, translation mine, sorry if not entirely accurate):

Hello (dear neighbours) Our (My) name(s) are (is) "insert some common names here, John and Alice for example, varies with each note", and we are a young married couple (young man, recently moved for work). We (I) are (am) interested in buying an apartment in this localization. We are (I am) paying in CASH!!! Please contact us (me) @ "some mobile phone number, always from the same operator".

While I see how this could be a legitimate offer, the sheer number of these is setting off some kind of alarm for me. I found no less than twenty in my mailbox last week and they keep coming. Second thing that's off is that this is quite literally the most desirable part of town, and unless they (or their parents) are the top earners in the country, they probably can't afford to buy an apartment here, much less in cash. And if they are indeed wealthy, I find it hard to believe that they would waste their time sticking poorly designed flyers in someones mailbox, rather than delegating the job to an agency or a professional.

The flyers themselves must be coming with some other generic ones (local restaurants, cable tv and such) as no one noticed anyone unfamiliar putting these in.

If it's of any importance, nearly all of the owners here are old, retired people, with some younger ones who inherited their apartments.

I also haven't called the number on those flyers, since it might be some malicious number (redirecting my call to the other side of the world or something).

For now we asked the security guys (the terrain is not fenced, they just patrol the area) to look out for anyone suspicious. But I am still curious, what could be happening here; my only guess is that they are looking for someone old and vulnerable to scam them out of the apartment, but since selling requires a literal truck of paperwork with signatures of a specialized lawyer, I still am baffled.

  • 3
    Definitely a scam, for the reasons you mentioned. – RonJohn Aug 13 at 10:07
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    The reference to "CASH" makes me think that it could be an attempt at money laundering. For a €100.000 property you oficially pay €75.000 and then you pay €25.000 "under the table". Then you sell it legally for €100.000, and you can justify that you got those €25.000 (minus costs/taxes) legally . – SJuan76 Aug 13 at 11:19
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    I interpret CASH as we don't need to get a mortgage. They will give you a check. – mhoran_psprep Aug 13 at 13:47
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    Well, probably a bank transfer, since I'm over 30 and never saw a check in my life (issued by or given to me) – Yuropoor Aug 14 at 5:11
  • You are overseeing one aspect, agencies take provisions, even if it's 'only' a few procent, it's a huge load of money in absolute numbers. The fact that someone can afford purchasing an apportment doesn't mean he has money to throw away, especially that often after buying you're left with little or no money for reparatures and furniture... – 9ilsdx 9rvj 0lo Aug 14 at 10:02
34

I know this from Poland.

This is a semi-legal poaching technique used by estate agencies. It's semi-legal because the agencies (company) cannot impose a buyer, but an agent (a sole representative) is not forbidden from doing that.

This is used to create leads for them they could then show to their clients. It works because buying direct, with cash, makes the price of a flat lower than it would be on the market. People might think about selling a place but don't want to go through the time consuming effort of looking for a buyer and then waiting for their credit approval, procedures and so on.

So by calling them you show that you are willing to sell. They decide for how much. For example: They know such a place should cost 250k. They tell you they have 210k in cash. Maaaybe the family could lend them an extra 10k. If you agree they list your place on their site (without you knowing it).< br /> Theny then try to sell the place for 250k. The 30-40k difference is their commission. PLUS they could have an agreement with the buyer who pays commission from the buying price. Additional gain.

The agency gain would be that such person:

A) doesn't actively try to sell (so the seller is not well informed about prices in their neighbourhood and haven't had their place appraised)

B) doesn't have a deal with any real estate agency that would make them exclusive (probably)

c) Even if they do this, allows them to avoid the fine because the agent works "as a friend", not an agent.

Cash may not be actually involved. Sometimes such agencies help a buyer to get fast approval (it also help them to hide the real price from the buyer).

Or after the whole hustle the seller is manipulated that 2 weeks waiting for money is fast. It's just a buzzword to lure people out.

  • 5
    Indeed this is Poland, and I had no idea you can list someone's property for sale without their knowledge without any repercussions. – Yuropoor Aug 14 at 5:17
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    What is the sentence in quite about? Is it a quotation from one of the flyers? – Tomáš Zato Aug 14 at 8:54
  • @Yuropoor you cannot as an agency. But if you're a shady agent you can just tell your client "I have a special offer that we don't list on our site". Or they tell that by calling them and giving info about the place you made a verbal agreement to be listed as their asset. – SZCZERZO KŁY Aug 14 at 9:21
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    @TomášZato "Dear neighbors, we are happy to buy an apartment in this block without intermediaries" – mcalex Aug 14 at 9:22
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    During the Vancouver boom speculator agents were accused of using straw buyers posing as "a nice young couple who wants to raise a family in the neighborhood" to get seniors to part with property at reasonable prices then use contract provision to reassign the deal to a holding company without the seller's consent. Not a 'scam' in the sense they did intend to exchange money for property in a lawful transaction, but certainly unethical. (especially when seller's agent is directly profiting from convincing seller to accept a lower offer price.) – Affe Aug 15 at 17:00
27

The "We Buy Houses for Cash scheme" is targeting desperate and misinformed property owners (like elders and minorities) through pressure purchase tactics to rip them off by taking the low ball offer with cash. In the process, the scheme maker (some are real-estate agents) actually already has a willing buyer, and this allows them to sell the house with handsome profits. Normally they will bypass any inquirer that doesn't match their profile (e.g. people well informed on their own property price, or that question too much) to save time and cost.

However, if the scheme maker is a real estate agent, in some locations there is a law that requires them to disclose themselves.

Unfortunately, this is a perfectly legitimate business.

  • What you say is true, but the details mentioned in the Question seem to indicate that this isn't what's going on. – RonJohn Aug 13 at 13:17
  • Also, the last sentence #1 makes no sense (you don't need a real estate agent to buy or sell a house), and #2 the grammar is muddled. – RonJohn Aug 13 at 13:18
  • @RonJohn I read the last sentence as saying that in some jurisdictions a real estate agent must disclose themselves as such. It's not saying you need an agent to buy or sell a house – Mohirl Aug 14 at 12:28
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    @Mohirl the answer has been edited since I made the comment. – RonJohn Aug 14 at 12:33
2

It's obviously a scam for the reasons you mention, but I doubt it involves an actual property transaction. Possibilities include that they'll have all sorts of "problems" getting cash and ask you for help (the classic confidence scam), or they're simply casing homes to later rob by pretending to see the apartment and then "choosing some other place".

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