Property Management Blog

Beware of People Who Buy Ugly Houses

Dora Pinter - Friday, June 21, 2019

Beware of People Who Buy Ugly Houses

It sounds like an offer too good to refuse. You were just sitting at home and going through your mail when you saw an offer on your rental property. The advertisement said that they would pay in cash fast, and the price seemed reasonable enough. While you planned on earning more money from your rental, you give in and accept the offer. Later, you find out that they deliberately underpaid you and scammed you out of thousands of dollars.
 Unfortunately, this scenario happens far too often in our area. As a Phoenix property management firm, we have personally watched owners give away their homes for unfair prices. These ripoff companies deliberately try to find sellers who do not really know how much their home has appreciated in value. In a hot real estate market, it is easy to forget how much a home is truly worth.
 Many of our property owners have owned their properties for years. When someone makes a purchase offer, they remember what they originally paid for the house and think that this offer sounds like a good deal. In most cases, these ripoff companies are underbidding on homes by $40,000 or more. They send out as many flyers, emails, text messages and brochures as possible because they must find people who do not know the market. Then, they close as quickly as possible in cash so that the owner has no chance to research anything or change their mind.
 How the Scam Works
 Recently, one of our elderly customers suffered significant financial losses because of one of these ripoff companies. Theresa was dealing with cash flow problems at the time. When the company made the offer, Theresa was struggling to pay for all the repairs that she needed to do on the property. While she had only had the property for three or four years, she had been thinking a lot about selling it for the last 12 months.
 Theresa had even met up with us a year ago to talk about her options for the property. At the time, she decided to wait before she decided on anything. When she met with a property manager from our firm, she found out that the property value of her home was at $185,000. Now, the same property had risen to $205,000 in value.
 One day, Theresa received a call from one of the ripoff companies. She still wanted to sell, but she was worried because she already had a tenant at the property. The unknown stranger on the other end of the line told her that this would not be an issue. The company had dealt with tenants before and could make an offer with the tenant in place.
 The caller offered Theresa $166,000 for her home. When she seemed hesitant, they said that her home was only worth $180,000. According to the company, the much lower amount was because they had to cover closing costs, agent fees and repairs after they purchased the property.
 Unfortunately, Theresa had no idea that her property was worth even more money than she thought. As soon as they sent over the paperwork, she signed off on it and sold her place for $40,000 less than market value. The next day, she got the worst surprise of her life after she called our Phoenix property management team. We told her that her property was now worth at least $205,000, but there was no way for her to get out of the deal.
 Theresa was unbelievably upset. We spent a long time listening to her as she tried to come to terms with the situation. All she had to do was call us for a current market valuation like she had received the year before. Now, she was stuck with a horrible deal and scared that the same people would force her into losing more money. They had even threatened to take her to court. Theresa was also terrified that they would return and try to bargain for an even lower price to cover repairs. Hopefully, she will avoid falling prey to their scam again. They already stole $40,000 from her, so we can only hope that she will not lose anything else.
 The Scammers Finally Lose
 In another case, one of our clients was barely lucky enough to avoid the same disaster. Stephen was savvier so he did not immediately agree to the offer. When the same kind of company reached out to him, he told them that he would look at the offer.
 Unfortunately, this is where the problem began. The scammers made a DocuSign with only one space for a signature line. This meant that you only had to click once in the document to sign and validate it. He reviewed the offer and realized that it was unbelievably, ridiculously low. Stephen set it aside for about six months before he decided to get serious about selling and called us to get advice.
 Stephen reached out to us and received the correct market valuation from a property manager at our firm, so he decided to have Service Star Realty market and sell his home. We sent over a listing agreement via Docusign for him to look through and sign.
 To his horror, Stephen accidentally opened the old DocuSign from six months ago with the low-ball offer, clicked into the document and it was signed. He immediately called them to say that it was clearly a mistake. The ripoff company said it was too late. He signed the wrong document, and they were going to take his property for the much lower price. When he tried to argue with them, they told him that it was valid because they had already recorded the agreement against his property.
 Stephen went through a huge amount of stress, but our broker helped to sort everything out in the end. With the help of an attorney, Stephen was able to list the property with us  They wanted to steal his property, but Stephen ended up selling the property for its market value with Service Star Realty.
 Protect Your Property Investment
 Unfortunately, these are not the only horror stories out there. Nearly everyone who has dealt with these ripoff companies ends up getting scammed. The company gives unbelievably low offers in the hopes that the owner does not know the current value of their place. Then, the ripoff company can rent the property or flip it for a quick profit. You lose money that you earned, but the ripoff company continues to grow its business and move on to trick someone else.
 If someone calls you on the phone or sends a flyer with an offer of cash for your property, be wary. We are here to help you with all your property management needs. Whether you plan on listing with our team or not, we want you to know the true value of your home. Let us know right away if someone calls from one of these companies. If you are sent a DocuSign file, do not open it or click on it. Send it to us, and we will make sure that it is not deliberately designed to steal your money.
 We wish that our property owners never had to deal with this kind of situation. Unfortunately, these scam companies are very active right now and keep sending out flyers to owners who are unaware of their property's true worth. To make sure that you do not get scammed, reach out to us for an accurate valuation and advice on how to avoid these scammers. 

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