Real Estate

 

How To Recognize “We Buy House” Scams 

There are numerous explanations why a homeowner would want to sell a house fast.

They may be facing divorce, job relocation, debt overload, foreclosure or experiencing other financial adversities and selling their home may help them avoid financial ruin and negative credit scenarios.  

Unfortunately, property owners who need to sell fast tend to attract con artists, scammers, predators and opportunists who have no remorse about profiting from someone else's misfortune.

 

When you need to sell your home, it is imperative that you choose the right investor or company. In this session, the REO Dr will help you avoid the three most common scams unsuspecting victims fall prey to.

 

The Newbie Nightmare

This trap involves using a novice and/or inexperience investor to purchase your home. It becomes a nightmare because these individuals don’t know what they are doing and as you know, time is of the essence. These newbies have usually read a few books, watched some DVDs and/or attended a hyped up real estate workshop and now they are thoroughly convinced they are the sum total of knowledge concerning real estate deal making.

 

This falsely fueled pride compels them to make promises they cannot keep, give advice and information that is potentially harmful if followed. Deal with these individuals and you will most likely lose your home. When it comes to newbies, if you are in a financial jam, thank them for their time and seek a seasoned investor or a reputable company.

 

The Bait and Switch Trick

This scam has been going on since the beginning of time. It involves the buyer taking advantage of the seller by inspecting the home and then giving them a verbal offer with the promise of delivering the written offer in a day or two. The written offer they tender is different than the verbal offer. Their trick is to get you to sign on the dotted line to the written offer that you never agreed to.

 

Most people are so taken in by the scam artist that they believe the written offer is the same as the verbal offer and they joyously sign on the dotted line. By doing so, they usually just: (a) gave up their property (b) gave up their equity (c) gave up their property and equity (d) became a victim of identity theft, and (e) entangled themselves in legal battles to get out of the contract.

 

The Mortgage Fraud Scam

To the casual observer, this opportunity seems like a dream come true. Property owners with little or no equity are shown how they can walk away with major cash at closing. But be advised; this scam involves enticing you to engage in committing a serious crime. On the surface, it appears to be an irresistible offer. The buyer offers to purchase your home on short notice and give you an incredible sizeable cash lump sum at closing. Who in their right mind would walk away from such deal? Not many!

 

The scam works like this…

 

You agree to sale your property to an investor at an obvious over inflated price for your property location, size and type. The investor brings in a real estate appraiser who knowingly over inflates the value of the property. The investor brings in a buyer, commonly called a straw buyer who qualifies for the over inflated mortgage. The investor has a loan agent/broker who pushes the fraudulent loan through.

 

Once the loan is approved, everyone involved in the scam receives his or her fee, the investor, straw buyer, appraiser, the loan agent/broker and you the seller. And finally, the straw buyer walks away from the over inflated property thrusting it into foreclosure. This scam is one of the reasons Georgia has one of the highest foreclosure rates in the country. Remember, this is a crime called mortgage fraud.

 

The Foreign Fraud Fiasco

In this scam a person outside of the United States contacts you with an offer to purchase your home for all cash; usually more than you are asking! They claim they are looking to move to U.S. soil immediately, with your assistance of course. They state in some form or fashion that will need your bank account and/or credit information to complete the transaction. Their story seems so compelling that most sellers can’t help but give up their personal information.

 

Unfortunately, their only goal was to get access to your bank account and/or or credit information. Once that information is acquired, these people will disappear into the night. And don’t even think about recovering your money, remember, these individuals live abroad outside of the scope of American jurisdiction. The bottom line? Get scammed by this bunch and you will have extremely little to absolutely no recourse.

  

The Deed Transfer Scam

In this scam, the buyer also known as a confidence man or a scam artist, overwhelmingly convinces you to transfer the deed to them with the promise of making the mortgage payments. For you the seller, this seems like the answer to your prayers if you were facing a potential foreclosure or other financial catastrophe. But in reality if you go through with this deal, you will have one or more of these issues to address.

 

(1). Although you transferred the deed to him, he didn’t assume the mortgage. Therefore, you are still legally responsible for the payment. If the mortgage was non-assumable, the lender could force you to pay the entire amount in full immediately.

 

(2). Once he has the deed in his name, he will most likely implement a tactic called equity skimming. This is were they use your property to acquire home equity loans or other lines of equity financing. Once they get the loans, these con artists let the property go into foreclosure. Further jeopardizing your credit and financial future. Never go for the deed transfer scam or any of these other scams, tricks or nightmares.

 

 How to Protect Yourself from “We Buy House” Scams

 


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