Appraisal fraud. Appraisal fraud is a part of most mortgage fraud scams. A dishonest appraiser inflates the value of the property. When the seller gets the check at the closing for a bogus amount, he pays off the appraiser and anyone else involved in the scam. Usually, the borrower doesn’t make any payments and the house goes to foreclosure.
If you’ve ever dreamed of becoming a real estate investor, you’re not alone. But that phrase is deceptively simple, because for 99.9% of all people who share your dream, it remains just that – a dream. Why? Because they don’t know how to do it, they don’t take the time to LEARN how to do it, and then they simply don’t go out and DO IT!
The first step is actually the one we listed last. You have to get out of the dreaming mode and get into the DOING mode! Dreams without action will always remain dreams. They’ll never become reality.
There are a million “good” reasons not to get started, but every one of them is just an excuse – not a reason. So if you want to become an investor, you have to BE one, and not just a wannabe.
Once you’ve gotten up off the couch and put yourself into action toward achieving your dream, you need to seek out a coach or teacher. There are many, many choices. All you have to do is get on the Internet and begin to read as much as you can. You DON’T have to spend ANY money at first, because there is a vast amount of free information out there, just waiting for you to soak it up. Then, once you have a grasp on the basics, you may want to seek out a coach, but ONLY after you have a working knowledge of what real estate investing is all about. That way, you can choose your coach wisely, from an informed position.
Finally, you need to learn the techniques so thoroughly that they become second nature to you. Those techniques will involve finding properties that have great potential, becoming an effective negotiator, structuring deals that will make you the most money with the least amount of capital outlay, and then how to resell the properties for the greatest amount of profit.
Make no mistake: you CAN become a real estate investor. It will take time, knowledge, effort, and BELIEF on your part, but first of all, it will take ACTION. So believe that you can do it (because you can), get educated in how to do it (the information is readily available), and then, most importantly – DO IT!
Copyright Jeanette J. Fisher
Every industry has its scam artists, and real estate is no exception. While most of the professionals who work in real estate are ethical and honest, there are people in the industry who want to take your money and run. Worse, there are scam artists who use real estate as a cover. These fraudsters may know nothing about real estate but simply use properties to extract money from victims. Sadly, properties mean large amounts of cash and this can attract criminals. You don’t have to be a victim, though. Whether you are investing in real estate or buying your own home, there are a few things you can do to stay safe:
1) Get it in writing.
The simplest and most effective way to stay safe is to assume that nothing is concrete until it is in writing and signed. Any verbal promised made simply does not count unless it is in a legally binding contract, so never assume anything until you have a contract in hand. Never assume that someone will follow through on a promise of any kind unless there is a viable contract.
2) Get professional advice.
An experienced real estate attorney should be looking at any property contracts you sign. If you are interested in investing, join a real estate club so that you can get advice and help from professional investors. If you are buying a home, get the help and input of a professional assessor and inspector. Interested in learning about real estate investing? Make sure that your instructor is an experienced and qualified investor themselves. Aim to work with the best professionals you can find. Whether you need to find the value of a home or the loopholes in a contract, turn to the appropriate professionals. They will help you uncover shady deals.
3) Keep abreast of common real estate schemes.
Thank goodness real estate scam artists (like other fraudsters) are not too original. In many cases, criminals will use the same scams again and again. If you are buying a home, refinancing, selling, or investing, find out from the media and from the IRS about common scams. That way, you can watch out for red flags.
4) Deal only with professionals.
Make sure that anyone you are dealing with – from a real estate agent to a real estate attorney – has the right qualifications for their job. If you are dealing with a buyer, make sure that they are honest about their employment and credit history. Scam artists will often invent elaborate backgrounds in order to gain your trust. If you detect the lie, you can detect the fraudster, so do your research.
5) Ask lots of questions.
Be willing to trust yourself to walk away if an offer is too good to be true or if your questions are not answered to your complete satisfaction. Any real estate deal you make should have a benefit for you and a benefit for the other party. If the deal seems to favor you, find out what the other party is getting.
6) Keep an eye out on your credit scores and accounts.
In many cases, real estate fraud ends with identity theft. Fraudsters may take your property under false pretenses or use your personal information to open accounts in your name. You are entitled to one free credit report per year from credit bureaus. This shows you how much you officially owe and which accounts you have open. Keeping tabs on your finances ensures that you don’t become a victim.
7) Don’t pay more than you can afford for real estate.
If you are buying, don’t pay more than you have to. Fraudsters will often try to have you spend too much or sell for too little so that they can pocket the difference. A classic scam in real estate involves a con artist with charm or an urgency encouraging you to sell your home for nothing or encouraging buying a property for far more than it is worth. Always know the value of real estate you are dealing with and budget accordingly.
These simple tips can prove helpful when doing business in real estate. These basic tips cover most types of real estate fraud and help you avoid the real estate scams that are out there. Good business common sense can help you stay safe.
This article is free for reproduction provided that the author biography, complete with links, is included along with this disclaimer.