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Investors Offering to Buy Your Home

Sep 11, 2012
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Most of the investors offering to buy your home for cash are not legitimate, even if they have a letter verifying that they have the funds to do it.  A VERY common investment practice these days is to tell a troubled homeowner that they will buy the home for cash, and make the process very easy for the homeowner.  As part of their agreement they get permission to advertise the property for sale, and to limit the marketing that you are able to conduct.  They then have an agent place the property on the MLS and start marketing.  They have this same agent submit a very low offer to the bank, and work to negotiate with the bank to get it accepted.  As they are waiting for the bank to respond they work to get higher offers from owner occupied buyers.  If they successfully get a bank approval for a low price they will attempt a dual closing and immediately sell the property to the end buyer.  This practice often involves trust fraud, evading taxes and federal reporting, and loan fraud.  In addition to that (as if that was not enough) the lower offer price makes your deficiency amount to the bank higher (which in turn has greater potential tax and future collection issues).

As a home owner you have an obligation to your bank to get them the best offer possible.  They will have you sign a document saying that there are no under the table deals occurring.

It is never advisable to engage in a transaction of this type with anyone.  Sometimes it will be a real estate agent that presents the idea to you, other times it will come directly from an investor.  Stay away from anything like this.

Read 1137 times Last modified on Wednesday, 26 September 2012 19:15
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