Property Sale with Showing Inflated ARV as the Purchase Price

[Jay Lee]

Hi,

Has anyone come across a real estate deal structured in a way that the buyer agrees to pay the seller (example given) $400k for the property but insist on showing an ARV price of $800k as the purchase price on the contract in northeast Philly area? Apparently, this buyer has purchased multiple properties this way. I understand the buyer is seeking to get a bigger loan by structuring the deal this way, but that'd be up to the financial institution. I'm just trying to figure out if this is a new scam that I havent seen or just a creative way to structure a deal

[Kevin M.]

@Jay Lee yes this is a scam that has popped up throughout Pennsylvania (and Philly in particular). The lender is getting scammed. The Inquirer just ran an article on this. Trust your gut in situations like this and avoid the temptation despite the weak market.