Sellers Beware

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Buyers Are Swarming

If your property is headed for a tax auction, you’ll be bombarded with calls, texts, email, letters, postcards, and even people knocking on your door, all claiming they want to buy your property.

They Aren’t Real Buyers

Most of these so called buyers aren’t real buyers. They’re phonies, trying to tie up your property under contract, often with a very small deposit, then sell it for more money to somebody else before the closing. It’s called flipping the deal.

They Won’t Close

These buyers won’t close on your property. They never intended to close themselves. They always intended to just flip it before the closing.

What they don’t realize, until it’s too late, is: when they try to flip it, real buyers, who would actually close and take possession, won’t take your property without clear title. Because you can’t give clear title, nobody wants to take the flip. So, the deal falls through because the buyers just walk away and don’t close.

Then It’s Too Late

All too often, by the time the sellers find out these buyers won’t close, the tax auction is only days away, and then it’s too late to get another buyer. Sometimes, the sellers get to keep the small deposit, but not always. Sometimes the closing agent, usually a title company, keeps the deposit to cover the fees, and the sellers get nothing.

To add insult to injury, sometimes the buyers get their deposit back! Why? Because, the language of their purchase contracts says giving good title is the sellers’ responsibility. Because the sellers didn’t have good title to give, the sellers get blamed for not closing and don’t even get to keep the deposit.

Kiss the Property Goodbye

With only a few days before the auction and no chance to sell again, the property goes to the highest bidder.

The sellers end up getting to keep the small deposit. Sometimes they don’t even get that.

We’ve Seen This Happen Way Too Many Times.

How to Spot Phony Buyers

Right to Assign

The purchase and sale agreement will have a right of assignment clause. That means your buyer can sell the contract to somebody else, before the closing, which is exactly what they intend to do.

The problem is, you don’t have good title, so no real buyer will take the flip and actually close.

Our purchase contracts don’t include this clause. We don’t need the right to assign, because we never flip our deals. We always close ourselves.

Sample Assignability Clause

Here’s the Assignability Clause from the most common real estate purchase and sale contract used in Florida, developed by the Florida Realtors and the Florida Bar:

ASSIGNABILITY: (CHECK ONE): Buyer ☐ may assign and thereby be released from any further liability under this Contract; ☐ may assign but not be released from liability under this Contract; or ☐ may not assign this Contract.

A phony buyer will prefer the first box, but even checking the second one only puts the deposit at risk if they don’t close. A real buyer will check the last box.

Warranty Deed

The purchase agreement will say the seller will provide a warranty deed, which means you guarantee good title. This is the way most real estate is sold in Florida.

The problem is, you don’t have good title to give. Your buyer might not even realize this until they try to flip the deal and find out no real buyer wants to close without getting good title.

Small Deposit

We’ve seen deposits as low as $10, but $100 is more common.

Think about this: your buyer is putting up just a few bucks, but you’re putting the property on the line. If your buyer doesn’t close, they’re only out a few bucks, but, most likely, you’ll end up losing the property to the highest bidder.

Your buyer has almost no skin in the game, and very little to lose by walking away from the deal when they can’t flip it, which, unfortunately, is what will most likely happen.

Long Closing Time

Why does your buyer need a long closing time? Because they want enough time to find a real buyer who will close.

When they don’t close, and the auction is right around the corner, you could easily end up losing the property.

Escape Clauses

Phony buyers want the ability to back out if they can’t flip your property. So, their purchase contract will have various escape clauses, sometimes jokingly called weasel clauses, because phony buyers will use them to weasel out of the deal when they can’t find a real buyer who will close on your property. Examples of escape clauses are:

  • Inspections: the buyer can back out of the deal by finding something they don’t like about your property after inspecting it.
  • Financing: the buyer can back out of the deal if they can’t get financing on terms they like.
  • Title: the buyer can back out of the deal if you can’t give good title.
Compare Our Clauses
Good Title

Here’s how we deal with these items in the purchase and sale agreement you’ll get when we buy your property:

All Cash

This is an all cash Transaction. There are no financing contingencies.

No Title Contingencies

The Buyer accepts title to the Property AS IS and cannot rescind this Transaction because of any defect which the title may have.

No Inspection Contingencies

The Buyer accepts the Property AS IS and cannot back out of this Transaction because of any defect which the Property may have.

No Property Tax Offsets

The Buyer recognizes property taxes on the Property have been delinquent and accepts the Property with its property tax status AS IS.

We Close Fast

Usually in a week or less.

Get All Cash—Now!

No waiting for your money. When you sign the docs, the notary will hand you a cashier’s check.

Before the signing, we’ll email you a copy of the cashier’s check, so you’ll be able confirm, with the bank, the check is good.