I had purchased a house about 15 months ago for about 100K. I had put in about 20K and more than 8 months of my labor to fix up the place. Anyway, the house has been in the market since Christmas with no real buyers up until a couple days ago. There is a LLC that wants to buy the house for a buyer for 250K!!! but at the settlement, we will be paying back the LCC 100K towards repairing the house and another 10k to another LCC for consulting services. So at the end we will end up with the asking price of 140K.
The guy that we have been talking to has already sent us the signed contract for a sales price of 250 minus 100 for repairs and 10 for other consulting services.
Now this a sale by owner house but we have a realtor friend who is as confused as us. How did they get the house apprised for 250k? Is this legal? Is it a scam?
we will be calling a lawyer tomorrow but I was wondering of anyone knows about similar situations.
What do you think the FMV of your house is? Is it anywhere close to $250k? It may not necessarily be a scam, but you can bet the lender and the appraiser are familiar with each other.
if everything is on the PA, you should be ok. Get a pre-signed cancellation, so if they don’t close on time, for what ever reason, you can move on and not lose any more market time.
the market value of my house is no where close to $250 … this is in Baltimore city where they are doing rehabs on every other house . .the house next to me, which is fully rehabbed, with an extension in the back, is going for $230 … i am selling mine for $140 which maybe about $10K under priced but not $110K.
is it possible for a lender and appraiser to work so closely with each other that they can overestimate the value of th house by $110k? Who is benefiting here?
I’ve seen these deals happen where the buyer, lender and appraiser are very familiar with each other. The lender has a warehouse line (meaning, they use their own money up front) to fund the deal. They get it rehabbed with the money, put some in their pocket, and then sell off the note. All of the line items were itemized on the HUD. Looks legit but probably toes the line. Perhaps they get another appraisal after the work is done, in order to sell off the note without repercussions.
i mean, they’re basically asking you to sell it to them for 110,000 over what you’re asking for.
you have to agree on paper to accept this amount, which you know is ridiculous.
just make sure you’re not getting involved in any shady legal areas. the last thing you want to be associated with is something this out of wack.
can you ask them for any further information on their project? are they planning to purchase anything else in the area - rezoning efforts for commercial? they may not want to disclose info, but maybe you can sign agreement not to disclose any info they give you.
i mean, you’re the owner and have a right to at least ask about this stuff.
i mean a sellers concession of like 170 or even 180k seems ridiculously high for a residential deal like this. right?
well guys, I think my worries are over!!! I started to ask the guy questions about the deal . .who the real buyer is, who the lender is and so on . .since then, he has stopped calling us … so i do think there was something fishy about the offer!
it is definitely possible to make a $250K house out of my $140K house … this is Baltimore city where there is a whole lot of rehab going on … My next door was fully rehabbed and now in the market for $230 … but if that was their intention, they would have bouth a shell for 100 and not mine for 140
I am desperate to sell the house … i just don’t want to get into any illegal activities even if I won’t be harm me … I was very worried that they were trying to fool a buyer by making him believe that the value of the house is more than what it is worth
It’s pretty obvious that they were attempting to set in place a “loan fraud”…at least that’s what I’m seeing here. In the end, someone would be left holding the bag and they would probably only be able to find you…
Well, My worries are back!! They people who had made the offer called back and still interested … So let me ask you experts this, If I talk a lawyer and he looks over the contract and says everything is legit, Do you think I still have something to worry about?
I’m new to all of this, so please excuse me if I ask a stupid question. I’ve read the forums for a while now and have heard about this HUD-1 form. Can someone please point me to where I can view one or can someone send me a gneric one via email. I just want to know what everyone is talking about and how to read it.
Definitely smacks of loan fraud. Last time I heard of a deal like this the FBI ended up being involved and seriously questioning everyone associated with the transaction. Turned out the escrow officer, the loan officer, the appraiser and the buyer were all in collusion. But the Feds really shook the poor seller down before determining he really had no idea what was going on. Perhaps you should ask them first before signing anything?!