This $20k mistake proves the importance of verifying buyer credentials.
Yes, you read that right. I lost $20,000 on a real estate flip deal. It hurts, but if my loss saves you from a similar mistake, then it’s worth sharing. Even with years of experience, this deal got me—and it all came down to one small oversight. Let me walk you through exactly what went wrong so you can avoid the same costly mistake.
I had a property listed at $499,900, and we got multiple offers. The best one was for $520,000. It seemed like a dream offer. Just as I was about to accept it, another buyer swooped in, offering $540,000… Of course, that got my attention.
The new buyer had what looked like a legit pre-approval letter from a bank (not just a mortgage broker), so I felt confident accepting their offer instead of the original $520,000 one. Everything looked good.
But then, during the due diligence phase, things took a turn.
Suddenly, a family member of the buyer called, and the truth hit me like a brick. That impressive pre-approval? It was totally fake.
Not only could they not afford a $540,000 house, they couldn’t even afford one for half that price. All their documents were falsified.
“Even if an offer looks legitimate, it pays to double-check and verify the documents. ”
I tried to backtrack and reach out to the original buyer who had offered to buy my property for $520,000, but they already bought elsewhere. The time wasted with the fake buyer cost me a legit, profitable offer.
I eventually sold the property for $500,000, but not without feeling the sting of losing $20,000. The deal was still profitable, but it could’ve been a lot more successful if I’d done one extra step of due diligence.
Here’s my advice for you: Always verify buyer pre-approvals. Even if it looks legit, double-check it. Look up the name of the mortgage agent. Confirm the credentials. One quick search could save you thousands.
If you’re looking to buy, sell, or flip properties and want someone who’s learned these hard lessons, let’s chat. I’m here to help you avoid these pitfalls so your investments can grow. You can call or text me at (514) 917-6284. Don’t let fake offers hold your property hostage. Be smart. Do your research. And always, always check those pre-approvals.
