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Beware and Be Aware of "We Buy Houses"

By Jesse Smith

Real Estate Broker/Owner with Smith Realty, Inc. BK3074945

December 11, 2006 11:21 AM

You probably have seen their billboards, we pay cash for houses!. Some even have websites.

If they offer to give you nominal amount of money to take over your payments and all you have to do is sign a quit-claim deed, then you are not being released from your obligation to your mortgage company. Your mortgage company will continue to call you seeking repayment of your debt. The mortgage company will continue to foreclose on the property

Not all of these "We pay cash for houses" buyers are scam artists. But many are. Some really will pay cash for your house. But unless they or you successfully negotiate with your mortgage company for a lesser amount, they will have to pay you a sufficient amount of money that you can pay off any and all of your liens.

If you do not receive a satisfaction of mortgage at closing, if your buyer does not want or demand title insurance, then in all probability you are dealing with a scam artist that will take possession of your home for a few dollars while your credit is still ruined.

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Scott Gormley

Oak Valley Mortgage-California Home Loans and Refinancing - Chico, CA

I see so many of these in California and it's scary stuff for homeowners that don't understand what they are getting themselves into...

scott

Dec 11, 2006 11:30 AM

Jesse Smith

Smith Realty, Inc. - Oviedo, FL

It's only going to get worse. Sometimes, the investor will give the owners $1k to "take the house off your back". They will get renters in there and take the rent and deposit for the 3-4 months it takes to get evicted. Those are the nastiest of investors.

Dec 11, 2006 11:44 AM

Chris Griffith

Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL

Bonita Springs Listing Specialist - Agent

I collected my parents mail while they were away. I was surprised at how many the received, the lack of pertinent info or contact info. Just a toll free number, no address, license number. I thought to myself: If they were older and confused or had no children monitoring them, they could be duped out of their home for pennies on the dollar.

Dec 11, 2006 09:04 PM

Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

There are some legitimate ones that buy "subject to" the exisiting mortgage. With some of these sellers that are in over their head, it might not be too bad an idea to offer this take over payments idea to them. It happenned a lot back in the 1980s when there were assumable with no qualifying loans. The smart thing to do is have some sort of reverter agreement if the buyer does not continue making the mortgage payments. I know a few attorneys who can help with this at a legitimate closing.

Sep 24, 2007 12:22 PM

Carmen Offutt

La Rosa Realty - Altamonte Springs, FL

There are some cases in Orlando where people were tricked into selling their homes in order to avoid foreclosure. Hundreds of families were duped out of their homes, sadly it was mostly Hispanic families that were not familiar with the legalities of what they were doing or/and the language.

Sep 25, 2007 04:55 AM

And.....what's maybe even worse is that it was done by Hispanics to Hispanics. Taking advantage of someone is just wrong....but taking advantage of your own because they will trust you more easily is just the lowest of the low.

Sep 25, 2007 05:08 AM

That is why any of these "creative" deals need to be done very carefully by doing a legitimate closing with a title company and representation. Not all real estate investors are bad, but not all of them are good either.

Sep 25, 2007 07:44 AM

Vicente A. Martinez

Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY

Realtor, Brooklyn - Long Island - Queens Homes

That's some great advice... I hope that more people come across this post so they aren't scammed into giving their homes away.

Sep 25, 2007 09:29 AM

Anonymous

In some cases thats the only money the sellers will ever see anyways. If they are heavily upside down what are the real odds they will ever recover any profits?

Mar 15, 2008 12:02 PM

Mike Wong

Keller Williams Realty Southwest - Sugar Land, TX

Realtor: Commercial, Residential, Leasing, Invest

Great topic and thanks for sharing. I should write something like this in my newsletters and blogs to my consumers. Need to research more, thanks for the tip!

Jun 11, 2008 04:37 PM

jesse

There are definitely some agents that are scammers. However, they almost always get caught and have their license taken from them. On the scale of agents being the scammers, I'd say agents are the least amount by far. Everyone, including the buyer, is to blame. However, this item is not about the mortgage and financial crisis. It is about the scammers that will take your deed for $1000 and try to sell it...then take $$ from the owners for rent....then three months later the owners getting a lis pendins.

Dec 17, 2008 03:48 AM

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Beware and Be Aware of "We Buy Houses"

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