While it’s a rare occurrence, there are some fraudulent tiny home builders or sellers floating around on the internet. Some of you may have heard of Matt Sowash, founder of the Colorado-based nonprofit Holy Ground Tiny Homes. He reportedly swindled tiny house buyers out of their hard-earned and hard saved money. He took money from buyers for orders and never delivered them and is currently being sued by several of the buyers.
Buyers should always be wary of everything they buy off the internet, but there are a few other ways to keep you and your money safe when purchasing a tiny house.
1. Beware of ads and posts on social media
Sowash used TikTok to sell his non-existent homes. Social media is a wonderful way to show off tiny homes, but never buy directly from an ad without first knowing more about the company and the home you are purchasing. Make sure the company has a website with direct contact information. In addition, other informational sites such as Google Maps, Yelp, and the BBB will give more information and a location for the company.
2. Visit the builder and their homes before buying
This may not always be possible, but with such a large and important purchase, make an effort to visit the builder in person. This is the best time to take a tour of all the models, look at how the business is run, and ask every question you can think of. The same can be said if you are buying a house directly from another owner or a dealer.
3. Do your research on the builder
With the Holy Ground Tiny Homes case, the builder has allegedly been in some legal troubles in the past. It only takes a few clicks to find out if the builder you have chosen has been part of any past lawsuits or other holdups with fulfilling orders.
4. Contact other buyers
If the builder has a Facebook page or other social media, see if you can contact some of the people who have purchased from the company in the past. Ask them how they like their new house and what the purchasing process was like. Ask them what they would change if they could.
5. Get everything in writing
While this seems like a no-brainer, the paperwork and purchase portion of buying a tiny house can get confusing. There is a lot of paperwork to deal with, but it’s best to have everything documented as much as possible. This includes all purchase orders, delivery times, bank transfers, floor plans, and all email and phone communications. In addition to a file with all printed paperwork, take photos of all documentation and save it somewhere on your computer or storage files just in case.
By Christina Nellemann for the [Tiny House Blog]
Thanks for sharing your tips! It is tough to earn. Therefore we should be cautious when spending it. There are scammers everywhere, so it is essential to be careful.
I was very close to this situation for years, and my heart breaks for the nearly 200 people whose lives have been turned completely upside down because of this person and his company. I have to say, you’re points are great and make perfect sense, but a scammer this elaborate was able to veil his scheme around every turn, up to and including visiting his build site which was a massive warehouse full of laborers and always had dozens of tiny houses on display. The devil is really in the details.
Do not ignore bad reviews. Even if it is just some, while other reviews are glowing, you must bank on the bad reviews. People were convincing themselves that the bad reviews were just one-off situations and that would never happen to them. Or they were smarter. Or would have more control. This wasn’t true and also most of the positive reviews were from his own friends, family and employees.
Second, the paperwork is huge. As you stated there will be a lot. But this scammer hardly sent a thing out and their “contract” was tiny and didn’t even include their own signature. Only the signature of the buyer.
Don’t ever feel rushed or pressured to order, via discounts or promises of free upgrades and free deliveries. And do NOT wire money! A legitimate company should allow the mailing of a check. Or the buyer should insist on payment with card and be willing to pay the fee. You must have some sort of payment that can be disputed and retractable by the bank, please. Sending a wire is like sending a suitcase of money. And very sadly the banks cannot get it back nor do they care to help.
Be safe everyone.