This actually happened to me once, while I did make a profit on the property an investor made the same profit after selling my house I had been in for 3 years just 3 months later.
The game is investors are working with some agents to get the best deals on homes, black owners are usually the target. The investor will go in and fix the house up with minor fixes and sell it for a much greater profit in a couple of months or less and the agent is allegedly getting an additional kickback.
How to avoid? Demand that a contingency be placed in the contract that the buyer must occupy the home for a period of one year. If they don’t agree to this red flags should be dropping from the sky. The buyer is probably an investor posing as a homebuyer and it’s a tipoff that your home is probably worth more than you’ve been told.
Get a second AND third appraisal. If the price ranges are varing this is another sign you are about to get screwed.
This couple used a white friend to dupe the agents and the house was appraised at 50% MORE than the white first appraiser told them it was worth.