An individual needing money or having trouble keeping up with their mortgage payment might consider a short sale. They usually want to sell the property as quickly as possible. They might not be able to pay off the complete mortgage payment from the proceeds received from the short sale; however, it will allow them to catch up with the amount they owe to the mortgage company.
There are multiple types of problems that a home buyer or seller might face when hiring a real estate broker, which may include loan fraud or other scams that a broker may orchestrate in an attempt to steal from the individual. The scams mostly take place in the transaction pertaining to short sales. However, an individual can avoid and prevent themselves from becoming a victim of these cons by foreknowledge and exercising caution. Here are some short sale scams you must familiarize yourself with.
The Undisclosed Payments
Real estate brokers can pull off a short sale scam using fraudulent activities and behavior that both buyer and seller are unaware of. Moreover, the lending institution may also suffer damage due to their illegitimate actions. Some of the red flags are payment transactions that took place outside the mandatory escrow period or there is a settlement statement that contains inconsistencies.
The Flopping Scam
A flopping scam is also one of the popular scams that can affect the buyer and real estate agent in deals. The signs include double escrows or a buyer through a fictitious entity or limited liability company involved in the transaction. This scheme happens through a short sale where the value of the selling property is misrepresented by the fraudulent buyer and they keep the difference in the low asking price, which is the true value of the property that is sold to the victim.
Predatory Negotiators in the Short Sale
This is a scam that affects both the buyer and seller. The offenders that involve predatory negotiators are those individuals who negotiated the sale and the brokers associated to the scam. The signs may include upfront fees, expenses other than escrow payment, and unlicensed negotiators. In such instances, the negotiator will provide their services for a flat rate or perhaps a percentage of the sale and provide guaranteed results of the sale. However, the individual may not have to do anything related to the progression of the sale.
Should You Get A Lawyer?
It is highly recommended for an individual dealing with a short sale transaction to procure services of an experienced short sale lawyer to ensure that they do not become a victim of such frauds. An attorney is well versed with legalities and technicalities related to short sale transactions, thus they will ensure that your rights remain protected.
However, if they have already opted to progress with the sale and suffered from the wrongdoings of scammers, they should immediately hire a competent short sale lawyer and initiate a claim to obtain compensation. They will gather evidence and devise a strong case in your favor to ensure that you get justice and that the broker does not get away with their actions.
A skillful short sale lawyer may also be able to settle the case outside the court without having to go through a trial process which can save both time and efforts that might be required in a tedious legal battle.
If you wish to get more information about this subject or schedule a free consultation, contact Jackson Abdalla Law Group at (773) 550-3853 to speak with an experienced short sale lawyer.