Hardly a week goes by that you don’t see news about somebody who’s been caught scamming the public. Real estate has long been used by con men to defraud the public. Since I help people buy and sell real estate, I want you to know the warning signs, understand how to protect yourself, then understand exactly what I can do to help protect you. The health of my business depends on people being able to trust me and trusting the process.
Here are some of the warning signs to watch out for –
1. Deals that seem too good to be true.
2. Deals that are too complex.
3. Deals that offer a guaranteed profit or rate of return.
4. Sellers or agents that pressure you to buy or commit quickly; without giving you time to investigate the details.
If you’re offered a piece of land, or any other kind of real estate, that seems like one of these examples, call somebody you trust, like a lawyer, and take your time before making a decision.
Here are some of the tools used by confidence men in real estate scams. They are known as such because you’ve known them previously and you’ve placed your trust and confidence in them.
1. Forged deeds.
2. Developments, properties, or trusts that don’t exist.
3. Phony appraisals.
4. Hidden loans against the property.
5. Unpaid taxes.
How can you protect yourself from these kinds of scams? Here are some suggestions –
1. Inspect the property yourself before making an offer.
2. Confirm the public records, including the deed, the title, any loans, and the status of the taxes. This is done by getting and carefully examining the title report.
3. Know who you’re dealing with – check the license status of any agents involved with the transaction. This can be done online at http://dre.ca.gov
4. Get everything in writing. Oral contracts are normally not binding in California real estate. You MUST get everything in writing.
5. Never pay cash toward the purchase price in advance. It’s expected that you will make out a check to the trust account of your agent or broker for the deposit when you submit the offer for the property. But that check should not be cashed unless the offer is accepted. Beyond the deposit money, you should not be sending money for the purchase price to anyone but the escrow company. That money should only be sent right before the recording of your new deed.
6. Make sure you are getting a new title insurance policy in your purchase escrow. If there are any problems discovered later that involve the title of the property, or unpaid loans or taxes, the company that insures the title will have to pay to make things right. You will be protected.
I hope this helps you avoid problems. If you’re thinking about buying some land and using my services, I promise you will get a clean deed and title insurance in any transaction in which I’m a participant.
