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.
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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.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.