If you have owned a house or commercial property for several years, chances are that someone has recently either phoned with or mailed what appears to be an offer to buy it.
In March 2023, an article in The Star News of Medford, Wis., noted, “Area residents are seeing a flood of unsolicited mail from people seeking to purchase their properties, often at greatly discounted amounts.”
“David” is the executor of his parents’ estate and received a “Solicitation and Agreement” to buy 40 acres of land not far from Medford. And, just as Jaymi Kohn, Taylor County, Wis., Register of Deeds, told The Star News that she found when researching other companies making such offers, no physical business address was found.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Red flags were flying
After receiving the offer, David phoned the telephone number included with the offer. “It was a Saturday,” he said, “and the phone rang and rang with no voicemail, which immediately raised my antenna. Who sends out a solicitation to purchase property and provides a telephone number without an answering service or voicemail?”
He called again the following Monday. “While I still felt it was likely to be fraudulent, as I am the trustee of an estate where that property needs to be liquidated to carry out the wishes of the trust, I felt a duty to explore if this was a legitimate offer. I spoke to a ‘receptionist,’ who did not answer using a business name. After inquiring where I could find properties the company has transacted, I was told, ‘I’m only a receptionist. Call Adam.’ Which I did — without a return call. So I phoned again, got a different receptionist.” He expected a different outcome, but when he asked the same questions, he received the same replies.
By this time, David said, he “was pretty certain something crooked was going on, especially with no call from Adam. So I texted the number as the letter instructed, and once again, there was no reply.”
Speaking with the receptionist again, but being far more assertive this time, David point-blank asked if the company was involved in some type of fraud. “Are you targeting older people who have owned parcels of land for extended periods of time and offering them a fraction of what their property is worth?” he told me he asked. “I told her that I planned to send a letter to the Arizona attorney general. Even that got no reply.”
Concluding our chat, David raised an important point about this unsolicited offer: The company claimed the right to cancel at any time. “None of this made sense,” David said. “Dennis, these 40 acres are worth over $400,000. And what do you think these people offered? $38,000!”
Analysis by two real estate attorneys
I asked Hanford, Calif., real estate attorneys Ron P. Jones and Robert B. Zumwalt — both friends of this column — for their takes on these unsolicited offers.
Jones: Interesting. I haven’t seen one quite like this before. What my wife and I usually receive in the mail is a postcard, often with a photograph of the subject property, telling us that we will get a cash offer with no contingencies that will close in 30 days.
The problem with these things is that they’re usually offering 25% to 35% of the market value — and sometimes much less. Somebody older, living in their house for many years, who bought the house for $15,000 cannot comprehend their house is worth $250,000 or even far more, depending on the area.
So, if they get an offer for $75,000 or $95,000, they think it’s a gold mine. The biggest part of the scam is that these snakes are making offers to people who don’t know better at 25 cents to 35 cents on the dollar and then reselling the property and making an unscrupulous profit.
Zumwalt: This solicitation has a “fill out the contract yourself” section, and that’s the first time I’ve seen something like this that invites trouble. It could very well be that these solicitations are designed to gather personal information about people with no real sale in mind in order to steal their identity.
There is an assignment clause in that contract. I have seen at least one case in which the “buyer” is acting more like an unlicensed real estate agent. My guess is their real intent was always to quickly sell the contract to the real buyer for a fee without ever putting up any money of their own. So, they bear none of the risks of investing their own capital and none of the ethical obligations of a licensed agent.
What to do if you receive an offer and do want to sell
Real estate brokers and attorneys recommend being aware that many of the people who send these offers are banking on you not knowing the value of your property. A lowball offer should be thought of as potential elder financial abuse, given older property owners.
If you get one of these unsolicited offers and are interested, ask for the person’s name and contact information and tell them you need to think about the offer and run it by your family attorney before making any kind of decision. It is important to verify the identity of the person making the offer before accepting any offer. Do some research on the person or company making the offer.
Your land isn’t going anywhere, so there is no hurry. Do not feel pressured.
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
-
Baby Boomers vs Gen X: Who Spends More?Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
Retire in Finland and Live the Nordic DreamHere's how to retire in Finland as a US retiree. It's ideal for those who value natural beauty, low crime and good healthcare.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What HappensCombining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden RisksPotential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid OffLife insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.
-
My Professional Advice: When It Comes to Money, You Do YouThis is how embracing the 'letting others be' and 'learning to surrender' mindsets can improve your relationship with money.
-
Direct Indexing Expert Explains How It Can Be a Smarter Way to InvestDirect indexing provides a more efficient approach to investing that can boost after-tax returns, but is it right for you?
