Short Sale Real Estate

Watch Out for Scams When You Short Sale Real Estate

The foreclosure rate is at an all time high...and so is the short sale of real estate. Whenever there's a consumer problem, there will be plenty of people ready to "help" them solve that problem. Some of these people (more likely consumer advocate organizations) are genuine, and legitimately want to help with no ulterior motives; some will want to help but have profit in mind for themselves; and some will only want to take your property away from you.

Here's how one of the scam works: The "investor" searches the public records and finds that your property is in foreclosure. Then he contact you directly, either by phone, mail, or in person. They explain that they can save your home from foreclosure by buying the house in a short sale and leasing it back to you until you get in a position to buy the property back. They scam artist will either have you sign over a quit claim deed (giving them ownership of the property) or charge you a huge fee for their services. The scam artist will eventually disappear, after pulling all the equity out of the property or sucking you dry with his fees. Either way, you're still facing foreclosure.

The reason it's so effective is that the techniques explained to the homeowner are the ways many legitimate investors complete short sale transactions. To help you tell the difference between the investor and the snake, the National Consumer Law Center warns homeowners to be wary when approached by people who:

1. Call themselves mortgage consultants or foreclosure service experts.

2. Seek fees before providing services to you.

3. Tell you to make your mortgage payments directly to them or their company.

4. Tell you to transfer your property deed or title to their company or into a trust.

5. Tell you that you can lease your house and buy it back after a couple of years.