Real Estate Advice

By Edith Lank

May 29, 2015 4 min read

On a Sunday, a couple looking for a rental (or maybe it's a house to buy) answer an ad on Craigslist and drive out to see the place. At the vacant home, they're greeted by the owner, who explains he has already moved out of town and just came back to rent out (or maybe it's to sell) the place.

They like the property, and the rent (or the asking price) seems like a real bargain. He's got other people coming to view the house, but he promises to keep it for our couple if they'll let him hold a check for the first and last months' rent (or an earnest money deposit). He'll just need to run a credit check on Monday and have the lease (sales agreement) drawn up.

They're careful to get a receipt when they give him their deposit. Everybody's happy. Win-win situation, right?

Not quite.

What's wrong with this picture?

He doesn't own the property.

How he manages to enter the vacant house, I don't know, but over that one weekend, he could meet several prospective tenants (or buyers), all of whom might give him deposits. I first heard of that scam a few years ago, and it's turning up more and more.

It wouldn't be out of line for that couple to ask for identification -- at least a driver's license -- before handing over thousands of dollars to a stranger. And their smartphone could take pictures of not only their prospective home but also its former owner and the license plate on his car. It could even pull up the county's public records or tax rolls -- a quick way to check the names of property owners.

*Cash for Your Home

Dear Edith: What is your opinion of people who will buy your house for cash? They list a phone number on a sign nailed to a telephone pole. -- B., to askedith.com

Answer: I expect they will indeed buy your house for cash -- and as promptly as possible. To understand how much they will offer, though, let's consider what their business involves:

Those buyers usually plan to resell your house on the open market. Until that happens, they'll have expenses for property taxes, insurance, utilities and yardwork. They'll have their own money tied up in the house. They will most likely repaint the interior, and they may need to make repairs before offering the place for sale. They'll make an allowance for unexpected problems that may arise along the way, and then they'll add in something for profit. Why else would they buy in the first place?

You can see that they'll offer you a deep discount from market value for the house. If you have a large mortgage, the offer may not be enough to pay it off, making the deal bad for you.

Someone who needs immediate cash in an emergency might find such an arrangement useful. A house is worth more, though, to someone who plans to live in it. Most homeowners have time to offer their property for sale in normal fashion, on the open market.

Edith Lank's weekly column, "House Calls," can be found at creators.com.

Like it? Share it!

  • 0


YOU MAY ALSO LIKE...