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When a Real Estate contract doesn’t seem right ...

If something about a real estate deal doesn't seem quite right, don't ignore your instincts.

The state Attorney General's office offers the following advice on avoiding real estate scams: • Beware of sales where you aren't asked to put any money, such as a down payment, into the deal or where you get money back at the closing. Also, beware of deals where you're asked to apply for a loan on behalf of someone else who couldn't qualify for credit.

• Walk away from deals where the seller encourages you to give inaccurate or incomplete credit information to a lender. Then notify law enforcement.

• If you're purchasing a building lot in a subdivision that will contain at least 100 lots when completed, be sure it is registered under the Interstate Land Sales Act and that the seller provides a copy of the required Property Report. Contact the U.S. Department of Housing and Urban Development (HUD) at www.hud.gov to see if a subdivision is registered.

• When closing on a real estate purchase, review the HUD-1 Closing Statement very carefully before signing. Your Real Estate Agent will also look at all the documents to be sure that all of the information is accurate. Don't be afraid to walk away from the deal if the information isn't accurate and the seller promises that problems can be taken care of after the closing.

• Beware of offers from companies that specialize in buying your home quickly. Many of these outfits advertise with promises like "we'll buy your home in days" or "sell your home without going through a Realtor." In many of these deals, the buyer puts the title to the property into a land trust and promises to lease the home and make the payments. But the seller doesn't pay off the mortgage and you're still responsible for making payments on it.

• If you're leasing a home with an option to purchase, find out who holds title to the home, whether there is a mortgage on the home, and who is responsible for making the mortgage payments. You need an Attorneys advise if you are planning on doing an option to purchase. He needs to draw up special papers which a Real Estate Agent is not permitted to do.

• Be skeptical of seminars that promise to teach you how to make money in real estate while spending little to none of your own money.

• To find out more or report a suspected scam, call the N.C. Attorney General's office at 877-5-NOSCAM.

For the S.C. Attorney General, call: 803-734-4200 or 800-922-1594 (toll-free within South Carolina.)

You should always do your homework

Real estate can be a productive part of an investment portfolio, but financial experts, planners and real estate developers say it's important for people to do their homework before they tie up any money. Here are a few basic tips:

• The value of your house probably will go up, but that doesn't make it a good investment. In fact, when you deduct taxes, maintenance, interest payments, remodeling and other costs, it probably loses money most years. But you have to live somewhere, so enjoy it.

• Make sure you review a market analysis by a Real Estate Professional or get a certified appraisal on the property you might buy.

• If you are buying only land that does not have access to a municipal water and sewer system, make sure the soil is suitable for a septic system. Local governments won't allow construction on lots that can't handle a septic system. You want to see the certificate.

• Deal directly with the lender. Land brokers are great for some services, but not for arranging your loans.

• Raw land is risky. A lot in the middle of a subdivision requires you do your homework. Buying several acres takes the game to a whole different level.

• Buy what you know. Throwing money at a hot property is asking for trouble.

• Don't invest money you need. If a deal promises easy money or no risk, it probably is too good to be true. Well-managed Real Estate can produce a nice stream of income, but it's going to cost some money to get in and it's not easily converted to cash without selling low.

 

Contact Angie Adams for Real Estate advise: www.AngiesWeb.com

Published Sunday, January 06, 2008 8:45 AM by Angie Adams NC/SC REALTOR® Broker

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