There are several reasons why you may have to sell your home fast – your company may be moving you to a new location, you may have lost your job and want to sell before a foreclosure or you may own more than the house is worth and want to get out from under a bad mortgage.
Selling your home to an investor could be your best option. But how reliable is this method? Is this a legitimate company? The housing market drop has created a new business and a new way to scam desperate home owners.
There are quite a few real estate scams out there, here are a few of the most common.
1. Equity Skimming: This is the most common property scam. It’s most common when a company buys a home from a seller facing foreclosure. The company claims to purchase the home and have the owner sign a contract to rent the home from them. In this case the company may be lying about purchasing the home just to collect money from the owner who thinks they are out from under a bad mortgage or they actually do buy the house and promise the owner they can rent the home only to ‘evict’ the to rent to someone else.
These companies are all about making money. They may even sell the house without clearing the mortgage putting the owner into an even worse financial situation.
2. Bait and Switch: Just as it says, the owner is promised something that is pretty hard to resist by someone representing a real estate company. The offer isn’t put in writing and when it finally is, there are some clauses or exceptions in the written deal that wasn’t part of the verbal agreement.
Many times the home owner isn’t aware of the small changes in the contract until it’s too late. These types of companies thrive on an owners excitement about a deal they think they are getting just to scam them out of their house and any potential money they could get from a regular sale.
3. Offers from Foreign Countries: This scam really applies to those owners who post on sites designated for owners selling without an agent. Once on the internet, it can be seen by anyone from any country. Beware of buyers from other countries, they may just be looking for account information or ask for some good faith money.
It’s important to know there are scammers in all industries, real estate is no exception. Especially with the fall of the housing market, fraudulent companies and shady people are out there plotting to take advantage of the many home owners under water.
A little bit of due diligence, being knowledgeable about the scams out there (and there are always new ones cropping up) and researching companies can help you avoid these scams.
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