Land Note Buyer Scams in Texas: How to Protect Yourself

Selling a land note in Texas should be a straightforward financial transaction that puts cash in your hand and relieves you of the responsibilities of note management. For the vast majority of note sellers who work with reputable buyers, that is exactly what it is. However, the secondary note market, like any financial marketplace, has its share of bad actors — individuals and companies that use deceptive practices to take advantage of note sellers who may not be familiar with how the market works. Understanding the common land note buyer scams in Texas and knowing how to protect yourself is essential for anyone entering the selling process.

The good news is that outright fraud in the Texas land note market is relatively rare. The more common problem is not criminal activity but rather unethical business practices — tactics that are technically legal but designed to extract more value from the seller than a fair, transparent transaction would produce. These practices range from bait-and-switch pricing schemes to hidden fee structures to pressure tactics that rush sellers into decisions they later regret. Knowing what to look for enables you to sidestep these pitfalls and work with a buyer who will treat you honestly and fairly.

This guide identifies the most common scams and unethical practices in the Texas land note market, explains how each one works, provides concrete red flags to watch for, and gives you practical steps for protecting yourself throughout the selling process. By the time you finish reading, you will be equipped to navigate the market with confidence, avoid the bad actors, and find a buyer who deserves your business.

The Bait-and-Switch — The Most Common Unethical Practice

How the Bait-and-Switch Works

The bait-and-switch is by far the most common complaint among note sellers, and it follows a predictable pattern. You contact a buyer and provide your note information. The buyer responds with an initial offer that seems surprisingly generous — higher than what other buyers have quoted, and maybe higher than you expected based on your own research. Excited by the strong offer, you accept and sign a purchase agreement. You stop talking to other buyers because you believe you have a deal. Then, during due diligence, the buyer "discovers" issues with the note — problems with the title, concerns about the collateral value, questions about the payment history — and uses these issues as justification to reduce the price. By the time the revised offer arrives, it may be ten or even twenty percent lower than the original quote.

At this point, you face an unpleasant choice: accept the reduced price after having already invested weeks in the process and having stopped pursuing other buyers, or reject the reduced offer and start the entire process over with a new buyer. Many sellers, feeling trapped by the sunk time and effort, reluctantly accept the lower price — which is exactly what the bait-and-switch buyer was counting on. The initial high offer was never intended to hold; it was a tool to lock you in and eliminate your other options.

How to Spot and Avoid the Bait-and-Switch

The most reliable indicator of a potential bait-and-switch is an initial offer that is significantly higher than quotes from other buyers. If you get quotes from three buyers and one is noticeably above the other two, approach that outlier with skepticism rather than excitement. Ask the high bidder specific questions: Is this offer firm, or is it subject to change during due diligence? What conditions could cause you to reduce the price? What is your close rate on quoted deals — that is, what percentage of deals close at or near the originally quoted price?

A legitimate buyer who quotes a fair price and stands behind it will have a high close rate — ninety percent or above. Longhorn Note Buyers, for example, maintains a 100% close rate on quoted deals, meaning every deal they quote closes at the quoted price. A bait-and-switch buyer, by contrast, will have a much lower close rate because many of their deals are renegotiated downward during due diligence. If a buyer cannot or will not tell you their close rate, or if the number is below eighty percent, proceed with caution. For additional guidance on choosing the right buyer, this article on direct buyers versus brokers in Texas covers important distinctions.

Hidden Fees and Charges That Erode Your Proceeds

How Hidden Fees Work

Some note buyers quote an attractive purchase price but then deduct various fees at closing that significantly reduce the cash you actually receive. Common fee names include processing fees, administrative fees, due diligence fees, document preparation fees, wire transfer fees, and closing coordination fees. Individually, each fee might seem small — $200 here, $500 there — but collectively they can add up to thousands of dollars that come directly out of your proceeds.

The deceptive aspect of hidden fees is not that the fees exist — some transaction costs are legitimate and expected — but that they are not disclosed upfront when the buyer quotes you a purchase price. A buyer who quotes $42,000 for your note but then deducts $2,500 in fees at closing is effectively paying you $39,500, which is significantly less than the $42,000 you were expecting. If another buyer had quoted $40,000 with no fees, you would have received more from the lower-quoted buyer, but the fee-laden buyer's higher headline number created the illusion of a better deal.

How to Protect Yourself From Hidden Fees

The fix is simple: always ask for the net amount you will receive at closing, after all fees and deductions. Request a written breakdown of any fees that will be deducted from the purchase price, and compare buyers on a net-proceeds basis rather than a gross-price basis. A reputable buyer like Longhorn Note Buyers provides all-in pricing with no hidden fees — the number they quote is the number you receive. If a buyer is evasive about fees or reveals them only in the closing documents, that is a significant red flag that should make you reconsider the relationship.

Before signing a purchase agreement, review it carefully for any provisions that authorize the buyer to deduct fees from the purchase price. If you see fee provisions that were not discussed during the quoting process, ask for an explanation and negotiate their removal. A buyer who insists on hidden fees that were not part of the original offer is not dealing with you transparently, and you may be better off working with a different buyer even if their headline number is slightly lower.

Pressure Tactics and Artificial Urgency

Common Pressure Tactics

Some buyers use pressure tactics to rush you into a decision before you have time to evaluate your options or get competing quotes. Common pressure lines include claiming the offer is only valid for twenty-four or forty-eight hours, telling you that another seller just called about a similar note and capital is limited, suggesting that interest rates are about to change and the price will drop if you wait, and implying that your note has a problem that will get worse over time if you do not sell immediately.

These tactics are designed to create a false sense of urgency that short-circuits your rational decision-making process. The goal is to prevent you from shopping the note to other buyers, consulting with an advisor, or taking the time to evaluate whether the offer is truly fair. By creating the impression that you must act now or lose the opportunity, the buyer gains leverage that allows them to push through terms that you might reject with more time to think.

How to Respond to Pressure

The most effective response to pressure tactics is simply to slow down. Tell the buyer that you appreciate their offer and that you will review it carefully and get back to them within a reasonable timeframe. If the buyer responds by escalating the pressure or threatening to withdraw the offer, that reaction tells you everything you need to know about how they do business. A legitimate buyer respects your right to take time, get competing quotes, and make an informed decision. A buyer who punishes you for being thoughtful is one you should avoid.

It is also worth noting that legitimate offers do not genuinely expire in twenty-four hours. Market conditions do not change that quickly, and a buyer who is willing to purchase your note today will almost certainly be willing to purchase it next week at the same or a very similar price. The "expiring offer" tactic is almost always a bluff designed to prevent comparison shopping. Call the bluff by taking the time you need, and you will likely find that the offer is still available when you are ready to proceed.

The Unlicensed or Unverifiable Buyer

Warning Signs of an Unestablished Buyer

While note buying does not require a specific license in Texas, a lack of any verifiable business presence is a red flag. Warning signs include a buyer who operates without a website, a physical business address, or a listed phone number; a buyer who communicates only through personal email addresses rather than a business domain; a buyer with no Better Business Bureau listing, no online reviews, and no verifiable references; and a buyer who is evasive about their company name, location, or history in the note buying business.

These warning signs do not necessarily indicate a scam — there are legitimate small operators who work from home offices with minimal web presence — but they do indicate a buyer who may not have the resources, infrastructure, or accountability to complete your transaction professionally. If the buyer goes dark mid-transaction or fails to fund the deal, you have limited recourse against someone with no verifiable identity or assets.

How to Verify a Buyer's Legitimacy

Before committing to a buyer, take a few minutes to verify their legitimacy. Search for the company name on the Better Business Bureau website and check their rating and complaint history. Look for online reviews on Google, Yelp, or industry-specific sites. Visit the company's website and look for signs of a legitimate business — a physical address, named team members, a phone number, and information about their history and experience. Ask the buyer for references from other Texas note sellers they have worked with, and take the time to contact those references.

Longhorn Note Buyers, for example, has been in business since 2007, maintains an A+ Better Business Bureau rating, operates from a physical location in San Antonio, and has purchased over $46 million in Texas notes. This level of verifiable history and third-party validation is what you should look for in any buyer you consider working with. A legitimate buyer will be transparent about their background and happy to provide verification of their credentials. A buyer who resists verification efforts is one you should approach with extreme caution.

Wire Fraud and Payment Scams

How Wire Fraud Targets Note Sellers

Wire fraud is a growing concern in real estate and financial transactions, and note sales are not immune. The most common wire fraud scenario involves a criminal intercepting email communications between you and the buyer and then sending you fraudulent wire instructions that redirect your payment to the criminal's account. The email may look exactly like it came from the buyer or their closing agent, with only a subtle difference in the email address or domain name. If you follow the fraudulent instructions and wire your documents or your note to the wrong party, recovering from the fraud can be extremely difficult.

In the note selling context, the risk is somewhat different from traditional wire fraud because you are the one receiving money rather than sending it. However, some scams involve a fake buyer who asks you to send the original note and assignment documents to a bogus address, effectively stealing your note. The criminal then attempts to sell the note to an actual buyer or uses the note to perpetrate other fraud.

Protecting Yourself From Wire and Payment Fraud

To protect yourself, always verify wire instructions by calling the buyer at a phone number you have independently confirmed, not a number from the suspicious email. Never send original documents to an address you have not verified through a separate communication channel. Be suspicious of any last-minute changes to wire instructions or shipping addresses, especially if they come via email. Use a title company or closing agent that you trust to handle the document exchange and payment, adding a professional intermediary between you and the buyer.

A legitimate buyer will understand and support your security precautions. If a buyer pushes back against your efforts to verify their identity, confirm wire instructions independently, or use a professional closing agent, that resistance is a red flag. Security-conscious behavior should be welcomed by any party who is operating in good faith.

The "We Need Your Note First" Scam

How This Scam Works

In this scenario, a buyer asks you to send the original promissory note and other original documents before the deal is finalized — sometimes before a purchase agreement is even signed. The purported reason is that the buyer needs to examine the original documents as part of their due diligence. Once you surrender the original note, the buyer either disappears with it, uses it as leverage to demand more favorable terms, or delays the transaction indefinitely while holding your most important document hostage.

In a legitimate transaction, the original note is transferred at or very close to the closing, after the purchase agreement is signed, the due diligence is complete, and the funds are ready to be wired. There is no legitimate reason for a buyer to need possession of the original note before the deal is agreed upon and the money is ready. If a buyer asks for the original note early in the process, that is a significant red flag.

How to Handle Document Requests Safely

During the quoting and due diligence phases, the buyer should be able to work from copies — scanned versions of the note, deed of trust, payment history, and other documents are sufficient for evaluation and due diligence purposes. Never send original documents to a buyer until the purchase agreement is signed, due diligence is complete, and the closing is imminent. When the time comes to transfer the original note, use an overnight courier with tracking and delivery confirmation so you have proof of when and where the document was delivered.

If a buyer insists on receiving originals before the deal is finalized, explain that you are happy to provide high-quality copies for due diligence and that the originals will be transferred at closing. A legitimate buyer will accept this arrangement without issue. A buyer who demands originals upfront and refuses to proceed without them is either inexperienced or has ulterior motives — neither of which is a good sign.

Protecting Yourself — A Comprehensive Checklist

Before You Start the Process

Before contacting any buyer, take these preparatory steps: organize your documents and know what you have, research the market so you have a general sense of what your note is worth, decide on your minimum acceptable price so you have a clear walk-away point, and identify two to three reputable buyers to contact for quotes. This preparation puts you in a position of strength because you are entering the process informed rather than dependent on the buyer for basic information about your own asset.

During the Quoting and Offer Phase

Get quotes from at least two or three buyers and compare them on a net-proceeds basis. Ask every buyer about their close rate, their fee structure, and whether the offer is firm or subject to adjustment during due diligence. Verify each buyer's identity, business history, and reputation through the BBB, online reviews, and references. Be skeptical of any offer that is significantly higher than others — it may be a bait-and-switch setup. Do not let any buyer pressure you into a rushed decision. For guidance on evaluating buyers, this article on common mistakes when selling a land note in Texas offers practical advice.

During Due Diligence and Closing

Review the purchase agreement carefully before signing, paying attention to fee provisions, renegotiation clauses, and any conditions that could change the price. Provide copies of documents for due diligence but retain all originals until closing. Verify wire instructions through a separate communication channel before sharing banking information. Use a professional closing agent or title company when possible. Keep copies of all signed documents for your records. If anything about the process feels wrong or if the buyer's behavior changes dramatically from the quoting phase, trust your instincts and be willing to walk away.

Ready to Sell Your Note?

The best protection against scams and unethical practices is to work with a buyer whose reputation, track record, and transparency leave no room for doubt. Longhorn Note Buyers has been purchasing Texas land notes since 2007, with over $46 million in notes purchased, a 100% close rate on quoted deals, and an A+ Better Business Bureau rating. Longhorn's pricing is transparent and all-in — no hidden fees, no bait-and-switch, and no pressure. When Longhorn gives you a quote, that is the number you receive at closing, and every deal closes as quoted.

Call Longhorn Note Buyers at (210) 828-3573 or visit longhornnotebuyers.com to request your free, no-obligation quote. Protect yourself by working with a buyer you can verify, trust, and rely on to treat you fairly from the first phone call through the final wire transfer. With nearly two decades of honest dealing in the Texas market, Longhorn Note Buyers is the safe choice for your land note sale.

Frequently Asked Questions About Avoiding Land Note Buyer Scams

How common are scams in the Texas land note market?

Outright criminal fraud is relatively rare in the Texas land note market, though it does occur. The more common issue is unethical business practices such as bait-and-switch pricing, hidden fees, and pressure tactics. These practices are not illegal but can cost you thousands of dollars in lost proceeds. By following the protective measures described in this guide — getting multiple quotes, verifying buyers, comparing net proceeds, and refusing to be rushed — you can avoid both the rare criminal scam and the more common unethical practices.

What should I do if I think I have been scammed?

If you believe you have been the victim of fraud in a note transaction, take immediate action. Contact your local law enforcement and file a police report. Report the incident to the Texas Attorney General's Consumer Protection Division. File a complaint with the Better Business Bureau. If wire fraud is involved, contact your bank immediately to attempt to recall the funds. Document everything — save all communications, contracts, and records related to the transaction. The sooner you act, the better your chances of recovering any losses or preventing additional harm.

Is it safe to share my note information with a buyer for a quote?

Yes, sharing basic note information — the remaining balance, interest rate, payment amount, property description, and payment history — is a normal and necessary part of the quoting process. This information does not give the buyer any power over you or your note. However, you should not share sensitive personal information such as your Social Security number, bank account numbers, or passwords during the quoting phase. Financial details should only be shared when the deal is closing and you need to provide wire instructions for receiving your funds, and even then, they should be communicated through a secure, verified channel.

Should I hire an attorney to review the purchase agreement?

Having an attorney review the purchase agreement is a prudent step, particularly for larger transactions or if you have any concerns about the buyer. The cost of a legal review is typically modest — a few hundred dollars at most — and the protection it provides is significant. An attorney can identify provisions that are unfavorable to you, explain the legal implications of the terms, and suggest modifications that protect your interests. Most reputable buyers welcome the involvement of the seller's attorney because it helps ensure that both parties are comfortable with the terms and that the closing will proceed smoothly.

What is the single most important thing I can do to protect myself?

Get multiple quotes. This one step accomplishes more than any other single action to protect you from scams and unethical practices. Multiple quotes give you a market benchmark so you can identify outlier offers that may be bait-and-switch setups. They create competition among buyers that pushes pricing in your favor. They provide you with alternatives so that no single buyer has leverage over you. And the process of talking to multiple buyers gives you a broader perspective on how the market works and what fair dealing looks like. Two or three quotes from reputable buyers is sufficient — you do not need a dozen, but you absolutely should not sell based on a single offer.