Melenda, it could be for real, but flags are going up in my head as well. Do you have anything showing the buyer has the cash to proceed? I would ask for proof of funds. And if he's signing but has a spouse that's a red flag as well. Be careful, this smells fishy.

I spoke with a title company, and they said before refunding any earnest money, they make sure the check has cleared the bank (if it was a personal check), or that the certified check was good. In that case, they wait 21 days before making the refund.
She also told me about another form of fraud where the seller received their proceeds by check after closing. They then walked back into the title company and gave the check back, asking for the funds to be wired to her account instead. But unbeknownst to them, she had taken a photo of the check and deposited it on her smart phone! I don't know if she got away, but it was pretty sneaky.

Barbara Coker
NMLS#228545

No two transactions are ever alike each buyer/seller do things a little different but as all the other agents have said if it is legit and he is working with a reputable agent then an earnest money deposit would exist and the agent would have proof of funds, and all the proper paperwork to submit. Have doc's been signed by both parties? If they have I would advise your friend to have a lawyer look over everything.

The easiest way to find to find out if this is a scam is if the buyer deposits earnest money with the title company. Too many details are missing for me to give a judgement but it is a bit peculiar if you ask me. Make sure you also get proof of funds.


Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
listings@dongroff.com

A good agent will likely cut the good buyers from the bad....

With cash offers we normally like to see:
1. Proof of funds....do they really have the cash to buy the house.
What do the proof of funds look like?...are they from a savings account, CD, Stock account, have you ever heard of the bank or brokerage?
2. Significant earnest money.....in relation to the price of the house.

I personally like the lease back part..... You'll know if they're legit if the earnest money check clears and title company is comfortable as well with the funds.

There are some red flags, but could be legit too. What is their agent saying?

Real Estate has "checks and balances" to eliminate scams:

To purchase with Cash, he would first have to submit POF, proof of funds
then he would have to deposit the total cash price plus closing costs into the Escrow.
Inspections do not matter
He can take TITLE anyway that is legal in your state
Some Home Warranty companies require Inspections; but is his problem, not yours.

The bottom line is that the Title Company protects you and provides the funds as a third-party.
It is really impossible for him to scam you.

Good luck and may God bless

It sounds strange but not impossible. Real estate transactions do not take place in a vacuum, without more info on the buyer it is hard to tell. Oggi is on target, but if the check clears and the bank where the GF funds was deposited receives the funds that lowers the risk. Best practice would be to have the buyer sign a release if they back out but drag it out long enough for the GF check to bounce or not return it at all.

The title company would be giving the refund of the earnest money, and if it was a bogus check, it would be their loss. As for the issue of his wife not being on the contract, she would still be required to sign at closing.
As far as the carpet goes, the old "carpet allowance" where the buyer would receive cash back outside of the sale was actually mortgage fraud. In the case of a cash deal, there isn't any cash to be kicked back. He would have just offered a lower price. Perhaps it was just that a 6 BR house is hard to find?
Let us know how it turns out.

Barbara Coker
NMLS#228545 Licensed Mortgage Loan Officer
100% Home Loans All Over Texas!

If it's a scam, the buyer will back out right before the sale is to be finalized and the buyer's cash balance is due. They will accept giving up a bunch of cash to the seller for backing out, hand over the check and ask for the balance of their deposit. Once the seller pays them the balance, they are long gone before anyone realizes the cashiers check delivered by the buyer is fake.

I hope what you described is not a scam but I am glad you are being careful.

Best of luck,

Oggi Kashi
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.

Melenda,
Was there earnest money? If so, who is holding it and under what conditions? If standard contracts were used and the earnest money was deposited on time, your friend may have met someone who just didn't want to lose this house.
Who knows it this buyer may have missed out on a previous home or two or just loved the house.
If it's a scam, the question is what is in it for the buyer. If they put real money up against a well written contract, it's hard to say where the scam may be.
Just don't let your friend refund anything too soon. There have been fake cashier's checks cashed and then refunds requested before they are found out. That would be my main concern. The seller can hold off on releasing the earnest money until it has been certified as good.