The real estate business has a big potential. Many people spend thousands of money every year buying their dream homes. Just like most booming businesses, real estate has attracted people who intend to steal from gullible and unsuspecting buyers and sellers. Sellers and agencies are part of the problem too. Some of them omit, misstate or misinterpret information with intention of scamming you out a few thousands. Before you hire any agents, or deal with any property sellers, you should be aware of the methods used by fraudulent people to scam others, check them out below
When you are buying property, the seller may try to make you some deals that are not indicated in any documents by your agency. Such sellers try to scam unsuspecting first-time buyers. They may give you money for unsettled house issues such as repairs behind you agent’s back. Most of these sellers don’t want you to know the degree of damage in their home, or simply don’t want to hire professionals to fix the damages. You may take the money and later find out that repairs cost more than what the seller gave you. Since the transaction is not documented, you won’t be able to take legal actions.
Some mortgage lenders impose excessive loan cost to the interest rates of unsuspecting buyers. Most loan costs are fixed and you should expect a maximum of 5% of the total fee as the closing cost. Lenders may try to scam you by adding extra fee into your interest rates during closing, without disclosing the information to you or your agent. Excess fees are more common in investment property but never in personal property. If you come across such agents, don’t sign the final documents and take legal action against the issue.
Agencies running a scam will try to trick you out of your money in any way possible. Fraudulent lenders will charge you prepayment penalties. These are penalties imposed on buyers who settle their mortgages early. These penalties do not apply to privately owned homes. Don’t sign documents with agencies that have this rule in their contracts.
Beware of lenders who don’t care about bad credit or don’t care enough to look at your monthly income and expenditure. Legitimate lenders should be able to question your payment toward the mortgage before they approve your loan request. If you have debts and too many commitments to your income, you may not be able to cover any mortgage expenses. Your downfall will benefit the mortgage company, they will get to keep the down payments and take your title deed as collateral damage.
If your lender won’t let your purchase discount points, don’t take the deal. Buying points is equivalent to paying mortgage interest in advance. You can buy points to lower the amount of interest to your mortgage loan. It is your right as a buyer to purchase these points if you need them
Before you make a deal with any mortgage company, investigate them and read all their contracts you find any traces of the mentioned scams within their company, leave and find a more competent agency .