Foreclosure Scam Warning?

Question

On Craigslist, I saw a link in bold which led to this article: [url] . The Link was titled "Foreclosure Help Scams" (or something similar).

How do you prevent the stigma of REI being scammers? How do you prove that you're honest?

Obviously, there are scammers out there. and obviously, an honest investor would probably not tell you to stay away from your lawyer. However, I do think for many people, its hard to tell who's who. The scenario described in the article is obviously a scam, and if someone reads this and is approached with a subject to or a lease-option, it may raise a mental red flag.

Just wondering how wholesalers deal with this issue...

Andy J. · Answer

I use testimonials (with pictures if at all possible) and my company is an accredited member of the Better Business Bureau. I'm very honest, straightforward, and suggest that the sellers I intereact with meet with an attorney to review any documents I present. I close at a title company and keep my word on everything I say without exception even if it's small and relatively insignificant. Building trust is your number one goal.

Don Konipol · Answer

There really are two issues here. First is actual scam, where the intent of the con artist from the beginning is to make money by lieing to the homeowner and then not performing.

Second is when a legitimate investor makes a deal with the homeowner and the homeowner is unable to or won't follow thru on their part. Since the deal didn't "work" this often gets reported by the homeowner as a "scam". At this point there is no shortage of consumer advocates, reporters, anti free market thinkers, etc. wanting to use a failed deal as evidence of "crooked" investors taking advantage of homeowners.

As legitimate real estate investors we must do our best to be absolutely truthful up front. We must not muddy the waters by putting on our "sales" hats to get the homeowner to sign. Full disclosure is our best friend. I rarely deal with homeowners anymore preferring to deal in the commercial arena. However, in the past when I dealt with homeowners I insisted that they sign a notice I provided spelling out all the pitfalls if they did not perform as promised. This cut off many situations in which the other party "forgot" what was said prior to the contract signing.

Account Closed · Answer

Hmmm that link didn't work let me try again: http://www.bbb.org/us/article/546

Foreclosure Scam Warning?

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