» 8 Actions to Take with Potential Real Estate Scam Artists! » Posted by Realestator      

Lately, everytime I read the news, I’m seeing a story about another case of Real Estate Fraud.

- Investor kills his partner to cover up trying to have a non-existent person buy their investment property when the bank got wise

- Couple makes offers on $4 million dollar homes with fake checks and i.d.’s

These are just a couple of the stories I have seen in the last three days!

It makes you realize that if you are going to be investing with partners, or if you will be buying or selling property directly from another individual, then you’ll need some Techniques to avoid endangering yourself or being in the middle of a Real Estate Scam.

1. Always Ask for I.D. I use this technique whether I’m showing a potential buyer property for sale or a tenant a rental house. Make sure they are who they say they are.

2. If they are a buyer, act just like a mortgage lender would. Get copies of their latest tax returns, bank statements and paycheck stub or 1099. Verify they have the funds they say are available for investment.

3. Ask potential buyers to provide a credit report. They will need a valid social security number to receive one, so this is one more check to prove their identity. Also, you may learn some telling information that can help you decide if you want to proceed.

4. If you are the buyer, verify the value of the home by having an independent appraisal - don’t take the seller’s word for it. This only cost a couple hundred dollars, but can save you a lot of time and money if the value doesn’t come in where the seller claims it is.

5. If you are the buyer, verify who the “true” owners of the home are. If there is a long lost wife or brother on title, they will need to sign the Quit Claim Deed as well, so don’t waste your time if all parties aren’t on board.

6. If you are the buyer, have a title report run by your local title company or attorney. You can verify what liens are on the property, from who, and how many mortgages they have in what amount. This information is crucial to negotiations and all liens will have to be removed prior to closing, so know what you’re dealing with.

7. Never, ever give money directly to a buyer or a seller! Always hire an independent third party such as an escrow company who documents receipt of the money, verifies its validity (does the check clear), and waits for instructions from all parties before it is dispersed.

8. Try to bring someone with you to all of your meetings, if possible. This is not only for your safety, but can provide you with a witness should you need one later if the deal goes sour.

By following these simple actions, you can avoid being the victim of a Real Estate Scam, and ensure you have a profitable investing career.

For more real estate investing information, visit the realestator’s website at www.real-estate-investing-support.com

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» Posted in Real Estate News on May 11, 2008.

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