Being in the marketplace to purchase a new house can be an adventure packed with excitement as well as unknowns. Since buyers are working within a specific budget, they’ll probably pay attention to special deals. But beware – sometimes deals that appear too good to be true are scams, and not everyone who offers a helping hand is actually planning to help. There are somethings out there that you should just stay clear of.
3 unsafe real estate traps to stay clear of
To prevent a bad property deal, we would like to assist buyer clients to stay clear of these common traps:
1. Scams
According to the National Association of Realtors, 90 % of buyers used the internet to look for a property during the buying process in 2012.
That number increased to 92% in 2015. Scammers are aware that people search for properties online, and they use the ease and anonymity of the internet to benefit from others.
One of the most common scams involves fake real estate listings requiring the victim to wire deposit money overseas in return for receiving keys in the mail. It appears to be an obvious scam but people get caught in this trap all the time.
Another common scam is dubbed the “loan modification scam” and involves fake representatives from government housing agencies offering to change your mortgage.
The victim pays a hefty five-figure “processing fee” and never sees the agent (or their money) again.
2. Not reading or understanding your rent-to-own contract
Having a contract is a necessary part of doing business, but it doesn’t guarantee protection from a bad deal. It’s your responsibility to read and understand every piece of any contract you sign.
The “rent to own” option is like renting a house with the choice to buy at the conclusion of your lease. Rent is set a little higher, and a portion is placed aside to be applied toward purchasing the home.
This procedure works well for people that want some time to build up their credit to allow them to obtain a better rate of interest on their loan, but there are a few risks involved.
Pay attention and protect your investment
Since you’re paying a premium on top of regular market rent, you want to be aware of your contract to make sure you don’t skip anything.
Does the contract explicitly state that purchasing the home is a choice, not an obligation? Does the contract detail exactly how much of the rent is being set aside for the final purchase? Do you know the length of time you have to make the choice to buy?
In addition to ensuring your contract is clear, there are other rent-to-own pitfalls including understanding that as the tenant, you’re responsible for all maintenance and repairs.
Court intervention
If you find yourself in court over a contractual disagreement, the court’s job is always to figure out what each party intended when designing the contract.
Should the ambiguity of the contract is found to be heavily in favor of the person who drafted the agreement, the court will more than likely rule against that party if it appears to have been intentional.
Do your research in advance by asking the other party to clarify any points in the contract you don’t understand before signing.
3. Non-disclosure of problems
Buying a home can be like buying a used car; there will always be something that needs to be fixed, and you have to either accept it or find another option that you like better.
The laws vary by state, usually, the seller is required to disclose any significant issues with the home including any leaks, pest problems or overdue repairs.
Sellers might not wish to disclose everything if they think it’s going to decrease their profit. But sometimes sellers omit problems on accident.
Similar to a used car, people get accustomed to living with certain defects, and it doesn’t occur to them to mention it while in the sale process. The best way to avoid this is to ask questions.
Any time you ask detailed questions about the property along with its history, you give yourself the opportunity to uncover elements of non-disclosure the owner could possibly have overlooked.
Trust yourself
Being conscious of the potential traps in buying a property automatically makes you less likely to fall. Always trust your own judgment and intuition. Absolutely nothing is worth risking the balance of your family savings just to save a few bucks on a 30-year mortgage.
Whether you are a first time home buyer or have not purchased a home in a couple of years. Things are always changing. So we wanted to provide you with a Buyer’s Packet of useful information to assist you with the home buying process.
If you need anything from us, we are always just a click here or call to 813-300-7116 away
