In Ohio, seniors are being warned of unexpected offers from real estate marketers who want to buy homes.

The state’s Real Estate and Professional Licensing body as well as the Department of Aging and Richland County are all working to warn deed holders about the growing problem of wholesaling schemes. Older homeowners are impacted the most.

What Is Real Estate Wholesaling?

Wholesaling means targeting deed holders who could be willing to sell their homes quickly. The wholesaler offers a discounted price for the home. Then the wholesaler can sell that home at market value, transfer the contract to the third-party buyer, and pocket the profits.

Two binding agreements come into play:

• The purchase contract between wholesaler and home seller.
• The legal assignment of contract rights to the third party, who pays and takes the home deed.

Wholesalers never have to touch the deed from their position in the middle. Technically, they aren’t selling homes — just contracts.

Wholesaling Is Basically a Contractual Bargain. Isn’t That Legal?

Now, you might ask, isn’t a deed holder who wants to sell a home quickly entitled to make a deed transfer? Of course! But with wholesaling, the target homeowners are typically facing financial stress, and can be confused about how much more they could get from the home by going through a traditional sale with a regular agent. For a number of older adults in north-central Ohio, this is precisely what’s happening. Sometimes the deed holders lose as much in home value in these deals as they get.

Lately, numerous states have begun to regulate wholesaling. Cities can regulate, too. Community Legal Services of Philadelphia prevailed on their city to regulate wholesaling.

Indeed, under the laws of Ohio itself, go-betweens count as real estate brokers. Cases of abuse can be investigated and wholesalers can face serious penalties.

Other Than Wholesaling, What Should Seniors Look Out For?

Older adults are increasingly being chased down by marketers — door to door, through leaflets and letters, and through phone calls.

Look out for cash for listing contracts. Homeowners that sign these get cash up front, but they have to go through a specific broker whenever they might decide to sell. They’re potentially on the broker’s hook for decades. Some of these contracts even bind the deed holder’s heirs.

In addition, we have to look out for:

• Unsolicited marketing messages for reverse mortgages.

• Proposals that do not fairly assess the fair market value of the homes they aim to buy.

• Offers of sale leasebacks involving lump-sum payments for deeds up front, which turn the sellers into renters of their formerly owned homes.

Many times, unsolicited marketing comes along with costs and legal gotchas that the deed holder may not detect before signing up. 

How Can Friends, Relatives, and Caregivers Help Older Adults?

Most of us have older adults as friends, neighbors, or family members, even if we’re not yet seniors ourselves. We can help our elders by verifying the sources of offers, or helping them check with their financial advisers as to what offers make sense and which are risky distractions.

If you’re in Ohio, and you or someone you know gets unsolicited or suspicious real estate marketing communications, you can email Ohio’s Department of Aging at webreal@com.ohio.gov or call (614) 466-4100.

More generally, the department urges older adults and their loved ones to stay updated on the hallmarks of known and emerging scams. Knowledge is the power to avoid the tricks and traps that can cost them their deeds.

What Are the Hallmarks of Exploitive Marketing?

Some typical tactics include:

• The “We buy any house” type of lingo.
• Promises of “benefits” to sellers that involve heavy or long-term obligations.
• A lack of details telling the potential seller the marketer’s identity and contact information.
• A lack of explanation of the seller’s legal rights.
• A sale that doesn’t offer the seller a current appraisal.
• Requests for the deed holder’s personal and financial data.

• Pressure on the deed holder to sign over a deed.

• No cancellation period for the deed holder.

• Tendencies to target people through online phishing scams, so the perpetrators appear to be friends and other contacts.

And of course, these scams go after older adults disproportionately. Not necessarily because older adults are vulnerable to scams. It’s because they tend to have mortgage-free homes.

Thank you for taking the time to get familiar with this issue. Let’s look after our seniors and their hard-earned deeds.