Recently, here in Oregon, we had a lady that was finding vacant homes that were for sale and posing as the owner. She was advertising that she was doing lease options and meeting potential buyers at the home. She would collect a large upfront option fee and first months rent and let them move in. The problem is, she wasn't the owner, and at the next showing it was found out that she wasn't the owner and the dream of home ownership was gone along with their money.
How could this be avoided? First, if the buyers had been working with an agent, that agent would have done a little work, like doing title searches, and gotten a disclosure form from the so called owner. That in itself wouldn't have been complete protection, but since these homes were being represented by an another agent, we would have found out by talking to the other agent, that this person claiming to be the owner was, in fact, not the owner.
Now had this been a "For Sale by Owner", the buyer, being represented by an agent, would have had the protection in that the buyer would not have written a check to the seller directly, and the money would have gone through a title company that would have required proper identification to close. During that time, in most cases, the truth would have come out. If they had an agent that set this up properly, they agent would have required the option money to be paid in to an escrow fund that would only be allowed to be dispersed at the end of the option, so the con-artist wouldn't have gotten that money. Then the escrow service would be paying the mortgage, taxes and insurance for the owner and after that had all been paid, only the remaining amount would have been given to the seller. So the most the con-artist would have gotten of the money would be a couple hundred dollars instead of $5000-$6,000 from the buyer.
As you can see, if any of these buyers would have used the representation of a qualified real estate professional, who understands lease options, they would have been protected all the way down the line, making sure that even it had been the real owner, it would have been set up to so that the first thing that is paid is the mortgage and taxes before the seller!
So protect yourself and use a qualified real estate professional and you won't lose your money and your dream of home ownership. Lease options are a great way to build equity and credit while realizing your dream of home ownership.
Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739
Todd@IFoundYourNewHome.com
http://www.ifoundyournewhome.com/
Todd Clark and the Friendly Home Team
Knipe Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)622-8739
I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard.
All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.
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Todd,
Excellent advice especially in this age of 'stolen identity' and 'privacy violations'...Thanks, Fran
Todd,
Three years ago we had a lady who was doing the same exact thing in Florida. One of our clients called me to tell me about this women.I checked her out and promptly notified the police.
She was arrested for fraud.
Hi Todd,
What a wild lady she must have been. Isn't it amazing the level someone will go to, and where do these people get their morals and standards from? Hope you had a great Thanksgiving.
Sincerely,
Tom Braatz
Renee - This is one of the first things I do is make sure an escrow fund is set up that pays PITI first, then the seller from what is left over.
Allen - It is dangerous if you don't know what you are doing. It isn't like a normal transaction. If the paperwork is done wrong you could lose a lot of money and your dream home.
Fran - I love to hear this from the escrow side! Most don't realize how important it is to use an escrow company in this kind of transaction.
Scott - Your client did the right thing taking that extra step, most don't though.
Tom - They don't have any, that is the problem.
Jonathan - With you in the rental market I'm surprised you haven't! With a for rent sign out front, I think this would almost be easier.
If I am not mistaken, in Florida we are not allowed to right option contracts, though I would not bet on it. I think, in this case we have to use the attorney.
But it is fascinating that people would find every opportunity to screw others. Unbelievable!
Todd Clark (Realtor), GRI (Washington Co, Beaverton, Oregon) - Great advise. What this makes me think of is identity theft, in this case the criminal is assuming the identity of the owner of the property - can you imagine if they brought in a contractor.
In my area, people are coming to abandoned homes as if they are job sites and stripping the houses in broad daylight - taking out cabinets, plumbing fixtures and even carpet. Go figure.
Now Have a Blessed Day,
John Occhi, Hemet CA REALTOR®
Mission Grove Realty
Hi Todd,
It amazes me that there is always a new scam to watch out for, good advice for consumers. Btw, I love your graphic! :)
Katerina - Is he a real estate attorney?
Jon - I would be surprised if you can't. Because I know you can do owner financing and you can rent properties. Combine the two and you get Lease Options. (I can put you in contact with my mentor, who lives in Florida, I know he would know!)
Christopher - She has been arrested!
John - OK, that is even scarier! Almost no way of getting caught.
Suzanne - Thanks and as soon as one scam is discovered, someone else seems to find a new twist.