Beware of These Common Housing Market Scams

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It would be nice if we could go about our lives and not have to worry about scams. Unfortunately, there are just too many people out there that find it easier to scam someone else than earn an honest living.

If you are looking to either buy or sell a home then there are several scams that you need to be aware of. To help with that we want to provide information that allows you to be aware of several housing market scams.

Mortgages

The potential for scams in getting a home mortgage became very real over the last few years. Lenders that were working in subprime and very dangerous loans caused a downturn in the overall housing markets. In some areas, they pretty much ruined home values.

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There are several things to be leery of when looking for a home mortgage. One of these is the classic bait and switch. This is where a mortgage company will get your attention and lure you in with low interest rates. But, you find out very quickly that for one reason or another, you don’t qualify for that offer. Of course, they will offer you a much less attractive mortgage. If you find yourself in this position then you want to consult with another lender.

Leaseback Scam

This is actually one of the lesser known scams. But, it is one that has been used for a long time. It is still very popular with criminals. They prey on people who are having trouble hanging on to their home. They seem to offer the perfect out. They will buy the home from you. You are no longer facing potential foreclosure.

They make it even sweeter by promising to allow you to stay in your home. They agreement is that they will lease it back to you. Instead of owning the home you will be renting it. The problem is that they are simply waiting for you to fall behind on the rental payments. As soon as you do, they evict you from your home. All of the equity that you had in the home is now theirs.

Flipping Scam

This is another scam that is very popular with criminals. Flipping homes by itself is perfectly legal. People take a home that needs repair, buy it at a low cost, do the repairs, and then sell it for a profit. If it is done incorrectly then it can become a scam.

This becomes a scam when people lie about the value of the home to get someone to pay too much. It may seem like it is hard for them to manipulate the sales price. But, they are able to do this by working as a team. They work with an appraiser that is willing to lie and/or a mortgage broker. Together, they are able to manipulate the sales price.

Buying a home can be very exciting. You just have to look out for a few things. So as you are shopping, beware of these housing market scams.