Friday, January 25, 2013

Real Estate SCAM Artists - They Want Your Money and Your House



The experts say that scam artists who prey on Real Estate markets have their highest activity level during two event times: When times are really bad and When times are really great. When times are bad, people often make decisions out of desperation and when markets are strong, people may jump into something that looks too good to be true--like an incredible deal on a foreclosure or short sale. Either way, be careful what you know and what you think you know. Scam artists are lairs. Good lairs. And sometimes great deals are not deals at all. The best way to beat them at their game is to not play. If it looks like a duck, smells like a duck, quacks like a duck--it's probably a duck. And if it looks too good to be true and the pieces don't line up--turn and run!

I recently had a transaction where my buyer went under contract on a home in a very prominent Austin area community. Once we got into escrow and the title company ran the title search, they discovered some anomalies in the title and determined that the owner was not able to transfer the title because they did not legally have full possession of the title to transfer it. It seems that they had entered into a transaction to sell more than a year earlier and the would be buyer eventually stopped paying the bills. They stopped paying taxes. Stopped paying HOA bills. And then they stopped paying the mortgage to the seller. At some point the real owner, who was financing the buyer's purchase, got the home back from the buyer--or so they thought. But when they closed on the house the transfer of title was not valid, apparently due to some slight of hand that the title company did not raise issue to, so the title for the house was never legally transferred back to the owner. Sound complicated? Yep. What is more than that, this little bit of slight of hand cost the seller ten's of thousands in outstanding bills and will cost them thousands upon thousands more before it is over. Now, they can't sell the house because they don't have the full title to the house to transfer to a new buyer and they will have to go to foreclosure court to get a ruling and take possession of their house. Wow. What a mess. 

Scams come in all kinds of variations and descriptions. Some of them look like simple cash deals in the beginning and turn our to be something quite different in the end. Some start with a phone call and an offer, sight unseen. Some start with a listing in one of the online sites that accept listings from anyone for a home that may not even be for sale and may not be their home! Be careful, especially if you are trying to go out and figure out how to buy a home on your own without professional guidance. It's not what you know, but what you don't know and what you don't know that you don't know that can cost you lots of money in the end. 

If an "investor" seems over anxious to do something with you and your property and the deal seems a little too good to be true--buyer beware. Seller beware. Hire your own real estate attorney and check out the whole deal before you jump. If you are not a Real Estate professional and this is not what you do 20 or 30 times a year--beware. Real Estate may not be rocket science, but I have seen lots of really smart people, smart business people in their field make avoidable mistakes under the heading--this is not that hard. A good Real Estate professional can make a difficult transaction look pretty straight forward. I am sure it works the same way in your business. 

Buyer beware. Seller beware.

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