Author: TFA Blogger

Buyers: What to Expect From Your Realtor

Hiring the right Realtor for the job is critical when buying or selling a home. Without experienced professionals by your side, the entire process can become a nightmare. The three main factors that will sell a home are price, condition, and location. No one can change the location, so if a home is priced correctly according to its condition, then it will sell. A good Realtor should properly research the market, and advise you to list the property at a price that will bring offers. Unfortunately, if the price advised is too high, in order to simply get the listing, you won’t know until months later when your house remains unsold.

The right realtor for you might not necessarily work at the largest brokerage, close the most transactions, or make the most money. Real estate professionals have a saying that 20% of the agents do 80% of the business. Your goal is to find one among that that 20% to work for you, and it’s not as challenging as you might think to find the best one.

Since your house is one of the biggest investments you’ll ever make, it makes sense to be a little choosy about whom you hire to help sell or buy it. Find an agent whose philosophy and methods align with your preferences. And be prepared to interview at least two or three agents to find the right person. Asking the right questions will help you gain insight into the agent’s capabilities and personality. 

A real estate agent will walk their clients through each step of the transaction onto closing. The following are some of the things you should look for when searching for the best realtor:

  • Endless Knowledge of the specific area that you are hunting. It’s important that the realtor know the good and the bad of each neighborhood and if she does not know it, will be able to find good and useful information. She needs to be able to give you research on the schools, the crime rate, upcoming development plans, and any other situation that might impact your decision.
  • It’s wonderful when the realtor is active in the community. By being a part of local organizations, charities, and events, they should have good relationships with other involved professionals in the area such as loan officers and home inspectors.
  • The realtor should be up-to-date on industry news and trends as well as take classes in continuing education programs. Having someone by your side while you look for a home that is knowledgeable is important. And, if they don’t know something they know where to get the information immediately.
  • Ask friends, family, and coworkers who they know or who they have heard about. Get recommendations. Check online reviews. Learn more about them from their social media.
  • The realtor you choose should make you feel like you are their only client. He should be available to answer any questions and address any concerns. you should be able to access them easily by phone, email or text and their response should be timely.
  • The best realtors are proactive and help find properties to see easily and quickly. They should know of price adjustments as they happen and proved you will any information on sales activity so that you have an idea of what is going on in the area you are interested in to help set an expectation on how much you may have to pay for a property.
  • The role of the real estate agent for a buyer when negotiating the offer is to communicate with the listing agent and/or seller on your behalf to negotiate the best price and terms. When preparing the offer you should be provided with a comparative market analysis (comps), a list of recently sold properties, active comparables, and expired listings and then should advise you on how differences in properties affect value. They will understand the market trends and advise you on an offer strategy.
  • Your realtor should have the ability to know what is normal or not with a home that might not be visible to you on the first showing. She will carefully inspect the property disclosure statement to determine if there are any red flags. An extra step she might take is getting the monthly cost for heat, water, and electricity.
  • Your realtor should be ready to help finalize, tie up loose ends and help answer any questions to be ready for closing. The deposit needs to be handed in on time in trust, documents including mortgage information need to be sent and so much more. To be sure it all goes smoothly and that you don’t get lost in the process, you’ll need an experienced realtor.

The Bottom Line: The home buying process is always complicated, whether you’re moving to a new state or buying your first place in your home state. Who you choose to work with is essential to the success of your house hunting and having the right realtor by your side can make a huge difference.

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Disclosure Examples

Disclosure laws in general require sellers to say upfront whether their property has certain known issues that could impact the buyer’s health or safety. These laws vary by state but are meant to protect both the buyer and the seller. Disclosing any issues about major home components, systems, and conditions puts the buyer on notice—and prevents the seller from being held liable for future problems.

The following are some of the most common disclosures required.

Lead

Federal law—the Residential Lead-Based Paint Hazard Reduction Act passed in 1992—requires the disclosure of any lead-based paint or chipped paint in any housing built before 1978. Under the law, homebuyers also have a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or related hazards.

Asbestos

The health hazards of asbestos are well-known in the workplace; the U.S. Occupational Safety and Health Administration sets standards for asbestos testing and disclosure in work environments. Although residential disclosures vary by state, many require disclosures about asbestos on houses built before 1975.

Plumbing Issues

Many problems with plumbing aren’t readily apparent. If you’re aware of plumbing and water related issues such as leaks, old and potentially cracked pipes, consistent issues such as clogged drains, or issues involving access to water shutoffs, broken faucets, or other water related problems that aren’t immediately noticeable but you’re aware of and fail to disclose, can potentially open yourself up to litigation for failure to disclose these problems.

Structural Damage

When homes are built and remodeled, they’re often built correctly, however, unseen defects in construction can often be discovered right after you move in or take some time to notice. In instances such as these, a homeowner may have noticed cracks in their foundation and has made repairs to close the cracks, hydro-lifted portions of the foundation, or other repairs to address these issues. These are very important issues that must be disclosed because they address the integrity of the property.

HVAC Concerns

This may seem like it can be a rather cut and dry issue that is addressed during an inspection, however, we have encountered instances where a home is inspected in the wintertime and the air conditioner isn’t inspected, only to find out that the AC doesn’t work in the spring. These types of failures to disclose the HVAC operative capacity, as well as the condition of these items, can leave a seller open to potential litigation.

The Bottom Line: If you are unsure about what to disclose, meet with your realtor to discuss. From state to state there are some interesting and unusual real estate disclosure laws. There is a legal obligation to disclose the information to buyers, it simply is not optional. There is, however, an advantage for the homeowner that comes with disclosing all pertinent information: The owner removes the risk of a lawsuit and all future liability with their properties after they sell.

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Should I Sell or Rent Out My House?

The question of whether you should completely sell your home or rent it out to future tenants is a big decision. Both options have positive and negative effects that must be carefully considered before making such a big decision.

  • How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations?
  • Because of the economy, many homeowners can no longer make their mortgage payments. What percent of tenants do you think can no longer afford to pay their rent?
  • Have you interviewed a few experienced eviction attorneys in case a challenge does arise?
  • Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner-occupied home?
  • Will you allow pets? Cats? Dogs? How big is the dog?
  • How will you actually collect the rent? By mail? In-person?
  • Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?
  • Do you have a list of craftspeople readily available to handle these repairs?
  • How often will you do a physical inspection of the property?
  • Will you alert your current neighbors that you are renting the house?
  • How much time do you have? When you rent out your home, you still have obligations as an owner. You need to make sure that you’re able to meet your tenants’ needs, such as repairs or emergencies while following all landlord and tenant laws. It helps to contact an experienced lawyer to learn more about these laws, too.
  • Are you financially prepared? Can you cover the cost of the mortgage if a tenant misses rent or if the house sits unoccupied for a few months? What about the cost of emergency repairs?
  • How much do you need to charge? You may want to charge enough rent to cover the cost of your mortgage, taxes, and insurance. If it’s feasible, you might want to set a rent that can partially cover repairs and earn extra income. Make sure that you’re able to ask for enough to prevent it from costing you money — and ask a real estate agent about fair market values in your area. If your rent amount is above fair market value, you may not find a tenant.
  • Can you afford the upkeep? Before putting your house up for rent, make all the needed repairs. Take care of any other minor improvements that make the home presentable and allow you to get the rent amount you want.

The Bottom Line: There’s no right or wrong answer when it comes to deciding whether to rent or sell your house. Meet with your Realtor and evaluate your unique situation and make the choice that’s right for your needs and your financial future

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New Year & Fresh Starts to Prepare to List your Home

The new year is a time for a fresh start and if you are thinking about putting your home on the market this spring now is a perfect time to start preparations! There are things to do before listing your home that will require little effort and hardly any budget – music to the ears. Enter 2023 with a calm, clean, and well-maintained home.

Declutter!

Short days and the cold season give us all plenty of time to be inside looking for things to do. Buyers will want to be able to picture what their life would be like in your home, so remove, toss and donate clutter and personal possessions. A clutter-free home is also much easier to keep clean between showings. Consider getting a storage unit where you can put away unnecessary furniture, throw blankets, pillows, etc.

Minor Repairs

With all the extra motivation the new year brings, take some time to tackle any of the minor repairs you keep putting off, like filling nail holes, repairing leaky faucets, touching up trim with paint, etc. Chipped paint, running toilets, and squeaky doors may seem minor but give the signal to potential buyers that your home has not been well maintained. 

Paint is one of the cheapest, easiest ways to update the look of your home before you list it. You don’t have to paint every room, just those that obviously need it. Rooms with dark, chipped or dirty paint are the ones that will benefit the most. If you have wallpaper in your home, consider removing it as it always dates a home and painting is such an easy remedy.

Kitchen Updates

This might be fun – change out the cabinet hardware in the kitchen. So easy to do and not pricey. Changing out the handles and knobs to a brass or silver finish can drastically update the look of your cabinets. Home Depot & Lowes have a large selection.

Deep clean your oven, stove, and refrigerator but be sure to keep on top of it weekly. It’s amazing what you will find when you pull out your refrigerator from the wall – have a vacuum handy! A clean, fresh, bright kitchen that makes the most of the space will attract buyers and does not need to cost an arm and a leg. Clean the kitchen windows, inside and out. Consider removing any window coverings.

Newsflash: Potential buyers will be looking inside your cupboards. If they are overstuffed, that gives the impression that there isn’t enough storage space in your kitchen. Remove excess stuff, mismatched items, and anything that simply does not look good. 

The Bottom Line: All of the above can be done in a month or less, just in time to get you ready to freshen up your outside. Putting thought and planning into the sale of your home means less confusion and stress during the actual home selling period. Happy 2023!

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On The Hunt For Your First Home

Buying a home is still considered a key aspect of the American dream, as a home is typically an appreciating asset that grows in value over time. Being a first-time buyer can open the door to tax breaks and federally-backed loans. Once you are ready financially here’s what to look for:

Location. Decide on this first to eliminate “buyer’s remorse” down the road.  Do the homework and research neighborhoods. School districts, local safety, and crime statistics can affect a home’s value. Even if you have found your “dream home”, the neighborhood could be completely wrong.  Drive through the neighborhood at different times of the day and night and watch the traffic, how are the streets and sidewalks? What are the neighbors like and how do they take care of their homes? Is the home close to places you might frequent (gym, grocery, schools)? Are there children playing safely outside?

Shop Online: Now that you know where you want to buy a home, there are plenty of online options to start the search. Zillow, Trulia, Realtor.com, and any local real estate agency.  Narrow down the Realtors that you want to connect with by reading their online reviews, looking at their websites, social media platforms and googling. The Realtor you choose will be the expert you will rely on most. Interview several before settling on one.

Be Frugal: Zero in on homes that are listed for less than the amount of money you have been approved for. Many first-time homebuyers don’t calculate the other monthly expenses or problems that go along with homeownership (broken appliances, etc).  Furthermore, other than the down payment, there will be money needed at closing.

Negotiate: This is where having the best Realtor will come in beautifully. Once you make an offer, the seller might come back with a counteroffer and after discussing the pros and cons with your Realtor, you will know if you should offer more or walk away. Keep your emotions out of the entire process. Too many people pay too much for a home because they have “fallen in love” and this type of emotion can lead to very bad financial decisions.

Do an Exhaustive Inspection: Do the homework and find the very best Home Inspection Company with the top ratings. Be there with the inspector and learn about the home, ask questions – you need to know that the home you are purchasing is structurally sound.  See the good and the bad – what repairs will be needed? Is the electric wiring adequate for today’s use? How are the water pipes, heating, and air conditioning systems?  When the inspection is complete, get a verbal and written report. Bonus – the company will be available at a later date for more questions.

The Bottom Line: The above tips are just a few important ones to help navigate the process, save money and avoid common mistakes.  Find a Realtor. While it’s easy to go through online homes and narrow down what you want, it’s not so easy to get from that point to the closing. There is the transfer of the deed, title search, negotiating, asking for “extras” that you might be entitled to, completing all paperwork and being the single point of contact with the seller.

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Live Feeds, Video, Social Media & Real Estate

Social media is a vital tool that realtors should absolutely use to grow their businesses, a way for buyers to discover home listings, show their expertise, and start developing relationships & leads. If you’re not using one or all of the social media platform options, you’re at a disadvantage, because your competitors probably are.

Instagram, Facebook, TikTok, Twitter & Linkedin are all free forms of advertising the homes you are selling. At this point, anyone with a smartphone, from kids to a retired relative is on one or more platforms. For a small price, you can have the option for boosting any post you make for the ability to become even more visible as well as have the option to reach the “exact” audience you are selling to.

Whether you’re working with an agent or selling your home on your own, how the listing is marketed is crucial. Sharing attractive, important, and relevant content daily is how to play the social media game. The images and videos you use should be of high quality.

These platforms can put Realtors and buyers in the same room together, yet miles and states away via live video. Just like an in-person showing, these live showings should be pre-staged, the walkthrough must provide the clients with a sense of the layout, and the online experience must be easily accessible to all users.

The outside of the home is important, too. It’s where you should begin your live tour as you would normally. You’ll want to make sure the buyer is getting a good look at the exterior from all angles. They will want to get a grasp of the home’s curb appeal, the parking situation, and the surrounding neighborhood as much as possible. Be ready to answer questions from viewers as they watch.

Video messages, live or pre-taped in your social media posts will enable your audience to feel like they know you and slowly want to work with you. Especially when you use the “stories” on Facebook and Instagram as a place on social that feels more authentic and real. Stories are where the viewer will discover more than what you share on your feed. You will be giving them direct access to you as you give them a visual, quick way to clearly see who you are and how you might be able to help them. Don’t be shy, just start talking and sharing. After a few times, this will become part of your routine.

The Bottom Line: All of these platforms are additional opportunities to grow your real estate brand and establish connections through fun, interactive experiences. Building your brand as authentically as possible through beautiful photos and videos is essential to the success of any business. Social media should play an important role in your marketing strategy.

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10 Tips to Help Prevent a House Fire

The Christmas season is underway and many homes are already decorated with live trees. Christmas trees are usually the focal point for every decorated home, but they also quickly burn if there is ever a fire. Some causes of these fires are the electrical distribution or lighting equipment as well as some type of heat source (such as a candle) being too close to the tree. One of the most common causes of real tree fires is a dried-out one. Check water levels daily and keep them hydrated.

Stay safe all year round – there are many fire safety tips you can use to protect your family and home and avoid a tragedy, here are 10 to get you started.

1. TEST YOUR SMOKE ALARMS REGULARLY

Smoke detectors are your first line of defense against fire because of their early warning capability. These days, they’re hardwired into homes to monitor smoke and carbon monoxide and have the ability to send alerts to your phone.

If you’re using a battery-operated one, do a routine check every six months to be certain it is still working. All it takes is pressing a button on your alarm. A weak beep means it’s time to change its batteries as soon as you can.

2. Check that HEATING SOURCES ARE WORKING PROPERLY

The National Fire Protection Association (NFPA) says heating equipment is the top cause of fire in American homes. Any faulty heating sources like space heaters, central heating systems, and fireplaces could trigger fire when ignored or left unchecked. Have a professional check-up once a year to be sure they are working safely and optimally.

In the meantime, do some prevention maintenance like cleaning the air filters regularly. If you are using a space heater, position it away from flammable objects. These little details are critical if you consider how debris and dust can be fire hazards when they get too close to a heat source.

3. Keep your oven/stove clean

Make sure to clean your stove and oven after every use. In particular, cooktops and gas stoves should be wiped after cooking. Modern ovens have a self-cleaning function that you should take advantage of every few months.

4. PAY ATTENTION WHEN COOKING

More than half of kitchen fires are caused by cooking disruptions. Remember that all it takes is a few seconds before things in the kitchen begin to catch fire.

Avoiding minor to major interruptions while cooking is a top priority to ensure the safety of your home. Some things you should remember:

  • Stay in the kitchen while cooking — if you must leave the house for any reason, turn the stove or oven off until you return.
  • For food that takes a long time to prepare, check back frequently. This will help prevent potential causes of fires, for example, if the liquid has boiled away and food is cooking dry.
  • Keep items that can easily catch fire — oven mitts, paper towels, cloth towels, food packaging, wooden utensils — away from the cooking source.
  • Be especially careful with oils and grease. These combustibles can’t be extinguished with water. Either smother the flames or use a kitchen-rated fire extinguisher.

5. ALWAYS CHECK YOUR DRYER’S AIRFLOW

Dryer fires occur in 2,900 homes in the United States each year due to clogged vents or a filter buildup that can cause a fire. However, this situation is highly preventable if you follow best practices.

Get your dryer inspected annually or every few months – there is no substitute for this. Next, always check if your lint trap is clean before putting in a new load of laundry.

Lint or small clothing items like socks can also get stuck at the back of the machine. So make sure to look for those and remove them prior to operating your dryer.

6. BE CAREFUL WITH CORDS, appliances & Outlets

Make sure that you don’t have too many appliances plugged into an outlet, which can cause it to overload. If this is the case, you should immediately lessen the load and keep things manageable for each of your outlets. Unplug countertop appliances like toasters or air fryers when you’re not using them.

Another instance to avoid is ignoring frayed or chewed cords. One spark from the exposed wires is all it takes for a fire to start. It’s a necessity to replace damaged wires as soon as you notice them, to avoid the risk of fire.

Check your cord placement. Cords tend to get hot so you want to avoid running them under a rug or between your wall and furniture.

Often, homeowners can see signs of potential electrical problems long before a fire actually occurs. Here’s what you should watch out for:

  • Lights dimming or flickering
  • Wall plates sooty or turning brown
  • Hissing sounds in the wall or in fixtures when they turn on
  • Switches or outlets feel hot while operating

7. STORE FLAMMABLE PRODUCTS SAFELY

Common hair products, cosmetics, and household cleaners can all be classified as flammable products. They all tend to combust when placed too close to a large heat source.

To err on the side of caution and avoid fire and smoke damage, you should always check the label of items you purchase, to know which products are prone to catch fire when exposed to heat sources like space heaters. Then, ensure you keep your flammable products in a cool, dry place.

8. PRACTICE CAUTION WITH CANDLES

Scented candles are commonly used in households, especially around the holidays. But if you don’t use them carefully, they could cause fire and smoke damage. Handling them with total awareness of their potential fire risk is key. Here are some rules to remember:

  • Always put the candles out if you’re leaving a room.
  • Blow them out before you fall asleep.
  • Place them in a spot that is far away from objects that can easily catch fire like curtains and blankets.
  • Never position them on an uneven surface such as a  carpet to prevent them from tipping over.
  • Keep lit candles away from your pet.

9. KEEP YOUR FIREPLACE SAFE

Your fireplace can be a source of fire if not maintained correctly. For safe usage, fireplaces must be maintained properly – they should be inspected and repaired at least once annually (even if you only burn a fire in the fireplace one time per year, cracks in the chimney, or the presence of bird nests can cause fires). Household fires start when chimneys fall into disrepair or when fires are burned unattended. When you have a fire going, it is also advised to stay in the room. Dispose of the ashes properly, giving them more than enough time to cool down. To be sure, put them in a metal container specifically designed for the disposal of ashes.

10. INVEST IN A FIRE EXTINGUISHER

Fire extinguishers can save lives, making them a worthwhile investment. Having them at home can bolster your feelings of safety. At the same time, they are also genuinely useful in case a fire breaks out. Put them in the high-risk areas of the house, such as the kitchen and laundry room. Also, check if your units are not yet expired. They usually last an average of 5 to 15 years.

A quick inspection of the pressure gauge is also needed. Just check if the needle falls in the fire extinguisher’s green area, and you’re good to go.

The Bottom Line: House fires can be deadly if you’re not prepared. Fortunately, there are many things above and beyond the 10 tips listed here that you can do to protect yourself and your loved ones from fires. Be sure to have a plan in place to evacuate your home in the event of a house fire. Know where all of your fire extinguishers are located, and teach everyone in the home how to use them and where they are located.

Practice fire safety and response to fires with the children in your home. If you have pets, live with very young children, or live with someone elderly, work with people in your home to ensure safe evacuation.

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New Build Title Insurance

Most people know how important it is to have title insurance when buying a new home. The buyer needs to have protection against defects or problems because of liens, encumbrances, or defects in the title when there is a transfer of property ownership.  But, what if the home being sold is new construction since there isn’t an actual previous home that has a title? Many prospective homeowners wrongly assume that newly built homes are free of title defects.

When a home is sold, the original seller transfers the title deed to the buyer. The hope is that the seller has had full possession of the title without any liens on the property and has the right to sell it. A title company will research public records looking for problems that might be associated with the property – filing errors, forgeries, undisclosed heirs – and once searched will provide a policy to protect the buyer from any issues that may be uncovered later.

All of the above makes sense if a home that is being bought has been owned by someone else. What happens when a buyer is purchasing the land to build a new house on? Why would title insurance be needed? Because the land was owned and may have been broken up from an even larger parcel that has undiscovered claims. The title to that land may come into a dispute in years to come. Most land is not completely claim-free, thus there is history. Furthermore, the builder may have bills unpaid to subcontractors and suppliers resulting in a lien on the new home. 

A title policy is a best and safest way in protecting the buyer of the land where the new home is being built.  There will be no question of ownership in the future, especially if the home in the new subdivision was not properly subdivided. 

The Bottom Line: The lender will want to be sure that there is a clear title on the property.  Someone owned the land on which the new home is being built before the buyer and the title to that land may at some point come into dispute. And, while there is no question the owners could experience disruption during a dispute, title insurance will ease the pain by covering the bills during the process. 

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Holiday Home Selling

Winter season is not the most optimal but if you hire a Realtor that knows your market well, you still can sell your home at a competitive price. If you are living in the Northeast, Midwest, or other cold areas, the following are some ways that can help to sell your home faster and at a fair price during the busy month of December and then through the darker months of January and February.

There are fewer homes being sold now, and winter in general, which makes people nervous about putting their homes on the market. More home buyers are house-hunting in the Spring months when the weather is warmer, and the days are longer. But, you might be surprised to find out that Winter could actually be a great time to put your home on the market. The new year is a time when most people are back at work after the holidays and will often search the web for their next big move. If you are serious about selling your home, it should be online and marketed early to ensure they don’t miss this audience.

Because it isn’t a high-selling time, you will need a very experienced Realtor to help price your home as it can be complex. You don’t want to scare off buyers by pricing too high or even too low, causing buyers to wonder what’s wrong with your house. When your home is put on the market in the winter, buyers often assume you are desperate to sell your home and may lowball you thinking you’ll sell for any price. Buyers that are house hunting during this traditional off-season time, usually mean they are eager to buy and more willing to negotiate the price.

One of the beauties of the holiday months is that many people adorn their homes with festive lights and decorations. People purchasing a home during that time may see the neighborhood in a different light—more festive and cheerful—and may be more willing to consider an area that they may have been on the fence about.

Stirring up some interest during cold January is to price your home slightly under comparable homes in order to draw in multiple offers. More offers tend to drive up the value of your home prompting more competitive bids from buyers who often will end up paying more than the initial asking price.

The real challenge might be to help dress up your home after the holidays in dreary January and February weather. To help make your home feel more welcoming, shovel the walks, add outdoor illumination along paths, light candles indoors, add cozy throw blankets, and have holiday-type smells such as cinnamon or cookies.

Furthermore, during the cold, any problems you may have in your home can become more prominent including drafts and leaks. To help lessen these potential problems, crank up the heat so buyers feel toasty warm and will be less likely to notice any issues.

While it may be difficult to sell your home during the holidays and January and February, it’s not impossible especially if you hire an experienced Realtor who knows your neighborhood well and can guide you to list your home at the best possible price. Sometimes, waiting to list your home during the beautiful Spring months when the sun is out and the trees are blooming and flowering can mean that you could miss out on potential buyers. Many Realtors will tell you, some of their best sales happened in the new year.

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3 Types of Real Estate Fraud

Buying, selling, and owning real estate is often the most expensive transaction many individuals will undertake in their lives. Hundreds of thousands of dollars are involved and dishonest tricksters and scammers are out there hoping to take advantage of those involved.

Con artists may use several methods to swindle you in one of their schemes. Foreclosure bailouts, home equity fraud, home renovation scams, rental fraud, and deceptive timeshare scams, are just a few types of real estate fraud that may be performed. Here are three of the most common:

Foreclosure Bailout

A foreclosure rescue scheme is a type of fraud that takes advantage of homeowners who have fallen behind on their mortgage payments.  The fraud perpetrator approaches the homeowner with promises of paying off the delinquent mortgage and helping the homeowner stay in the property. 

There are many variations of a foreclosure rescue scheme.  Some schemes require the homeowner to unknowingly transfer the property title to a third party.  Other schemes will promise homeowners that if they transfer the title, they can continue to rent the home and repurchase it at a future date.  The purchaser of the property, sometimes the foreclosure rescue artist, is now free to refinance the property or to sell the property to another party.  Sometimes the foreclosure “rescuer” charges the borrower high ‘service fees’ up front and then disappears with the money without providing the promised service. 

Home Equity and Home Renovation Fraud

According to the Council of Better Business Bureaus, home-remodeling contractors ranked slightly behind car salespersons and auto mechanics in generating the most consumer complaints. Be very careful when using your home or your home equity as security for a home improvement loan. Fast-talking salespeople will offer to refinance your home at a lower interest rate to provide cash to the homeowner, the cash can be used to pay for home improvements or to pay off bills. Victims are frequently asked to sign blank contracts or contracts that they were not allowed to read before signing. Later, the homeowner discovers that they signed a contract that contains terms in contrast to the originally promised terms. This results in the loss of equity in the victim’s home, and also they have signed a mortgage in which they have incurred considerably higher interest rates. The homeowner is now faced with a higher mortgage payment, one that they may not be able to afford.

Rental Fraud

Rental scams occur when the victim has a rental property advertised and is contacted by an interested party. Once the rental price is agreed upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

Another type of scam involves real estate that is advertised online. The scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them. Often, the scammers use the broker’s real name to create a fake e-mail, which gives the fraud more legitimacy. When the victim sends an e-mail through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner. The “owner” claims they’re unable to show the property without payment because they are either out of town or out of the country. If the victim is interested in renting the home, they are asked to send money and shortly thereafter the property is no longer available.

The Bottom Line: Be suspicious of unsolicited email or telephone offers. Scammers often find victims through these spam emails. They may send tens of thousands of those emails, hoping to find a handful of individuals who will respond. With advanced technology and interacting digitally with victims, it can be challenging to avoid real estate scams. However, it’s important to stay vigilant about protecting your personal information and bank accounts. Only work with qualified professionals you trust and familiarize yourself with some of the common warning signs. If you believe you’ve been involved in a real estate scam, make sure to contact the authorities immediately.

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