RRR Austin

Tuesday, September 26, 2006

Too Good to be TRUE! Fraud in Real Estate

Unfortunately there are many people out there in the world who do nothing but prey on other's weaknesses. Almost everyone has a hard time "Working by the sweat of their brow", and therefore this "weakness" ends up being targeted all the time, to almost everyone, by just about anybody.

In real estate there are always "Get Rich Quick Schemes" whether it be in your city or if it be in another city, we're always hearing about this "great" idea!

Many of the traps and pitfalls people run into now adays are dealing with Mortgage Fraud. Many people out there are "high risk" according to a bank, but mortgage officers will try to get the person to "fudge" a little on how much money they make or how long they've worked or where they've lived in the past so they can get them the loan. Time after time, we've seen these cases end up in foreclosure, showing that the original bank qualification was "dead on".

In today's market, wherever there is hot real estate activity, such as that in Austin this past year, many real estate agents will travel or advertise to other areas such as California or Arizona and let them know that they can buy them a house that'd be great for investment. These investors beleive them and their numbers and let the agent buy them homes. Then they decide they want to sell the home and find out that there isn't any equity in the home! Youch!!

If the agent is a REALTOR(r), then there are some things that can be done, but if they aren't the investor is "stuck" in many cases. I'm always leery of someone telling me that I can build a house and sell it for an exhorbanant amount of money right after it's completed. I know of some markets that have done that in the recent past, but Austin is not one of them. Austin has a good steady growth, not an explosion.

There are many good deals out there where someone can make a lot of money, but in most cases we should ask ourselves, "If this is sooo good, why aren't they doing it? Why are they trying to sell it to me?"


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