These difficult economic times have some people grasping at straws for ways to make ends meet. This presents opportunity for "quick fix" scam artists that can rob people of the equity in their homes. Usually these scammers target the elderly, but a recession like the one we have been experiencing opens up new opportunities to target homeowners of all ages who are in financial distress.
Sometimes these scams will target homeowners who, in fear of foreclosure and trying to save real estate commissions, will attempt to sell their own homes. As anyone who has tried this knows, a "For Sale by Owner" sign will generate lots of calls from real estate agents looking for listings. Rather than these legitimate agents though, scammers will target these signs or respond to ads with a formula that appears to save commissions and rescue the homeowner from bad credit reporting.
The "investor" making the contact may offer to allow the seller to stay in their home for modest rent in exchange for a deed of trust on the property, just until the owner gets back on their feet. They may even offer a small down payment to help the homeowner catch up on some other bills. Once the deed of trust is signed, the seller feels the pressure is off and they are relieved of their commitment to make mortgage payments.
What often happens is that the "investor" will promise to help you sell your home in exchange for the trust deed, promising to pay you more when the house sells. Meanwhile, they claim, they are helping you to prevent foreclosure and you are saved.
What really happens is this; the "investor" does not take over your mortgage payments. They may collect rent from you, on a house you own, and never make a mortgage payment. Ultimately, this "relief" leads to foreclosure, leaving the homeowner with no place to live and a tarnished credit history.
If your home has a lot of equity, as with many seasoned citizens, the scammer, once they have the deed of trust, will sell your home, pay off the back debts and keep the equity you should have had. All this in the name of saving you from those despicable real estate agents.
No matter how much pressure you may be feeling over missed payments and the ensuing collection calls that make you shiver in fear every time the telephone rings, be sensible. Don't sign any papers that you don't understand. Get all promises in writing. Make sure that any document that causes you to sign a deed of trust relieves you from all liability of your mortgage.
If you are selling your house yourself, check with the Attorney General's office to see if there are any complaints against the buyer. Title companies will handle the transfer of property for you and will make sure the documents are in order and that they accomplish your intent.
If the person contacting you claims to be a real estate agent, check with the Idaho Real Estate Commission (http://www.irec.idaho.gov/) to see if there has been any disciplinary action taken against them and to make sure they do have a license. When working with an agent, make sure they are a member of the National Association of Realtors. Realtor members are self-policing and subscribe to a Code of Ethics which mandates a higher standard than most state laws. If the Realtor does not play fair, file a complaint with the local board who will mete out disciplinary action if an ethics violation has occurred.
Trust an expert... call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker, Realtor and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664 with your questions or commentary.