WARNING SIGNS WITH “INVESTORS”
Or…… warning signs you are dealing with an IMPOSTER, or possibly a CROOK. Someone that does not have the funds to close on your house….. Or someone who just wants to get you under contract, and has absolutely no obligation to close on the sale....
(flipper - wholesaler – Someone that does not actually have the money to close.
Or …I just went to a "how to get rich in real estate seminar" last week and now I am an “Investor”)
Many, if not most, “investors” are only trying to list your house with a disguised contract that is titled as a Purchase Contract but is actually only a listing agreement. The contract provides no requirement for them to actually close on the transaction
Their contracts are LOADED with exceptions and "out clauses" so they can legally terminate the contract at any time and leave you holding the bag ... In this case the bag is your unsold house.
A Big Red Flag is a Buyer who wants to market or show your property prior to closing. He/She is just trying to sell the property before he closes. This is an indication you are dealing with someone that has no money, or the ability to close at all. If they don't find a buyer, then they simply find a reason not to close.
Beware of the Buyer wants a key to the property prior to closing.
Other than the initial viewing, beware if the Buyer who wants access to the property or any reason prior to closing.
Here is an example of a clause you might see from a crooked investor. Run from this investor quickly:
ACCESS: Seller shall permit Buyer and Buyer’s affiliates access to the Property at reasonable times after execution. If access should be delayed on any calendar day(s), then Seller shall automatically grant buyer additional business day(s) of extension to the closing date and/or the due diligence period.
Yet another clause you might see in their contract .... This is even worse. They actually have NO obligation to purchase your house at all .... Again .... run as quickly as you can,,,,, and call us for a real offer.
DUE DILIGENCE PERIOD:
For nominal consideration and $ _________, Seller grants Buyer the unrestricted right to terminate this contract by giving notice of termination to Seller within ________ days after the effective date of this contract. Buyer must deliver the Option Fee to the Escrow Agent within 3 days of Execution. Buyer authorizes escrow agent to release and deliver Option Fee to Seller. Option Fee is to be applied to the purchase price at closing.
Here are some of the warning signs…
I will buy your house “subject to….” …..ANYTHING … (other than clear title report)
I will buy your house “after …..” ……ANYTHING … (other than a clear title report)
I need to have my contractor come back and take a look….
I need to have my partner take a look…. or I will have my partner call you
I need to call my “investor” ….
I need more than a week to close….
I need to talk with my bank…
I need a lock box on the house….
I need an “option”……..
I need you to pay closing costs, title insurance.
I need to rent the house for a few months before I close, and then you get your money….
I will buy your house but give you the purchase price later…. For any reason ..
I need to buy your house “subject to” your current loan….
I will “take over payments” on your loan….
Beware of the Buyer wants a key to the property prior to closing.
Other than the initial viewing, beware if the Buyer who wants access to the property or any reason prior to closing
If the Buyer is Mr. John Doe Investor, "AND OR ASSIGNS", then most likely the person you are meeting with will not be buying your house. He will be trying to find someone who can buy the house and assign the contract to them. Usually, these people do not have the funds to close.
If the Buyer tells you they are funded by another investment firm or lender, then run as fast as you can. The Buyer just told you that they do not have any money, and they are relying on someone else that may, or may not, fund the purchase of your home.
One of the newest scams is the bogus “PROOF OF FUNDS LETTER”. The investor will try to convince you that they have the funds to close with a worthless letter from some other investment firm with conditions the investor cannot meet. If the letter is not from a local bank that you can walk into and verify, it is most likely worthless
Here is another scam that was just brought to my attention by someone who used one of the companies that advertise on television and radio. With this scam, they offer you a great purchase price. You are elated with the offer, and immediately sign the contract. The bad news comes when you have moved from your house and get to closing table. Now the company comes up with reasons why they need to lower the purchase price. They usually lower the purchase price by many thousands of dollars, assuming you now have no choice but to accept their much lower offer.
I have seen a number of investment companies advertising that they are an Accredited Business with the Better Business Bureau and have an A+ rating. I actually checked with the Better Business Bureau and discovered that many of these companies do not have high ratings, and are not actually accredited at all. If they lie about that to win your confidence, then how can you trust anything they say.
I receive emails like this every day form multiple investors "Reddtrow Properties, LLC. is selling an option or assigning an interest in a contract. We do not claim to be the owner of this property. We simply have an equitable interest in the property." Here is another one Homewood Properties, Inc. is selling an option or assigning an interest in a contract and does not represent, warrant or claim to be the owner of or currently possess legal title to this, or any of the properties we market for sale. Companies like this have no intention of purchasing your home, they only wnt to get you uinder contract and try to find a a REAL investor to actually purchase your home. If this is what you want, then just call a licensed Realtor. If you actually want someone to purchase your home, the give us a call.
I thought I had seen it all, but today i found out that there are "INVESTORS" that are listing houses for sale on Facebook and the Internet they have spokenb to the owner about, but they actually have no contract or purchase agreement with the owner of the property at all. They are hoping to sell a house they have no legal right to represent, or to negotiate on behalf of the owner. They are taking these actions without the knowledge or approval of the owner at all.
If you have a clear title, we will buy your house for the amount agreed and be able to close, most likely, faster than you can move. If you need time to move, that’s just fine. We will wait for you to be ready, and close at your convenience whether it be days, weeks, or months.
If you have encumbrances on your title, such as loans or back taxes, we will still buy your house. We will only subtract for the encumbrances* on the title. We will pay the encumbrances in your name by Certified Funds at closing, and deliver them to the lienholder by FedEx….. The rest goes to you.
If you would like to close at a Title Company …. No Problem… If you would like to close in our office on the week-end after normal business hours, also No Problem. We have the legal capabilities and Notaries on staff to meet your needs.
*Encumbrances might be the loan on your house, tax liens, taxes due to the day of closing, judgments, bankruptcy charges…..
We have been a local family owned company for over 40 years,
After over 35 years in business we have had no complaints to the BBB from either a Buyer or Seller …. Ever... .Check out our A+ rating Here.
We never make an offer on a house unless we have the funds in the bank to close!
We never assign our contracts to someone else!
We close on every contract we sign!