I BUY HOUSES – SELLER BEWARE

For Sale.jpgDriving around town you might see signs posted at intersections advertising that a person buy’s houses or sells them to investors. These signs are typically posted by real estate scammers who have attended seminars that you see advertised on TV on how to become wealthy in real estate using other people’s money. If you are contacted by any of these individuals you should be very cautious in your dealings with them since the catch is that they become wealthy using other people’s money.

These type of transactions usually involve people who are underwater on their mortgage or who need a quick sale. The real estate scammer convinces the sellers that they should deed their property into a trust set up for them and the scammer will manage the property by finding a buyer or a renter until the property is sold. The scammer also provides disclosures to the seller advising that he or she will use their best efforts to sell the property but that it may never be sold. The scammer convinces the seller to provide them with mortgage information for the scammer to make the mortgage payments in connection with the management of the property. In the disclosures the seller acknowledges that he or she will continue to be obligated to pay the mortgage payment until the property is sold but there is no guarantee that the mortgage will ever be paid off. Lastly, the scammer will present the seller with a document that transfers the seller’s interest in the trust and in the property to a corporation or other entity owned or managed by the scammer.

The net result of the transaction is that the scammer obtains title to the property without making an actual purchase and the seller is still on the hook for the mortgage until the property is sold. But in the transaction the property is never sold because the scammer (who has title to the property) offers to owner finance to new buyers thereby making money off the difference between the new buyer’s payment and the cost of the original owner’s mortgage. Typically these new buyers are persons with bad credit who don’t qualify for conventional funding. Hence they have a high foreclosure rate and the scammer ends up foreclosing on the property and reselling to another high risk purchaser over and over. For most sellers who have been hooked into these transactions the only way out is to stop paying the mortgage and ruin their credit.

Real estate transactions are complex legal transactions. Anytime you are involved in a real estate transaction it is usually prudent for you to seek the advice of legal counsel. Don’t be the other person’s money that makes someone else wealthy while your credit gets ruined. At the Law Office of Stephen O’Rear, P.C. we help people who have been defrauded in real estate transactions.