HomeBuyer Scams!

              Jon Gosche Real Estate
                                                                                                   
  Boise Idaho Real Estate                                                                                            208.870.2115

                  Buyer Agent Specialist!   Realtors® serving Boise, Meridian, Eagle, Kuna, Nampa and South West Idaho

Boise Homes for sale.  Call one of our our agents to find out how to get the best deal possible on Boise Homes.  Builders NEED to sell their Boise Homes.  Now.  They need to sell their Boise homes that they built during the building boom and are still for sale in Boise, Meridian, Nampa, Kuna and Caldwell Idaho!

                                          email:  gosche@cableone.net

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We Buy Homes in Any Condition!  We Buy Homes in Boise, Meridian, Ada and Canyon County.  Why you should not use a Real Estate Agent!

I just googled and read several real estate investor sites that are soliciting Boise area home sellers.  Many had headlines like the ones above and or statements like those in there "information."  They claim they can close in as fast as three days.  They say they will buy ANY home in ANY condition.  They claim they can save your credit.  They can buy even if you are in foreclosure or if you have defaulted several times already.  Some of them claim that they can buy from you even if you can't sell your home to someone else for as much as you owe on your home. 

Warning to Home Owners concerning foreclosure rescue plans click here for video.

I have had several of these "investors" contact me and some of my agents particularly looking for short sales. If you keep reading I will come back to this and tell you more about this shortly.  But first, you should be asking the following questions:

  1. Why would ANYONE be soliciting and buying ANY house in a time when real estate prices are dropping and selling is so hard?

  2. Why would they want you to not use a real estate agent?  Of course they say that a commission is avoided.  But who benefits from that?

  3. If  you owe more than you can sell your home for HOW are they going to buy your home?

  4. Why won't I buy your home?  Why aren't Realtors® flocking to buy your home when they can use their commission for a down payment, know the market, resell it with little or no commission?

No doubt just as I can you could come up with a lot more questions.  But this is enough for a start.

  1. They are obviously looking to profit.  They know that their are only two ways to profit.  First it is true that buy fixing up a house they may be able to sell it for more than the condition that it is in.  But the truth is I have seen homes that are in worst shape sell for MORE than homes that have been fixed up because there are "investors" who would buy a run down house for more money than one that is fixed up because they think they can make more.  If these investors are really smart they are going to use your home condition to beat you down on your price.  Hopefully for less than you owe if you have lost your job, or have some compelling reason to move.  30% of homes for sale in the Boise area MLS at the time I am writing this are short sales or foreclosures.  Homes that are selling are selling for the same price as these short sales and foreclosures even if they are not.  Not everyone selling owes more than their home is worth but almost no homes are selling for near as much as in 2005 and many are selling for more than 50% less that they would have sold then!  Often the investor attempts to tie the property up in a short sale negotiation and get you to agree to not market to anyone else.  But the investor does and hopes to find a buyer to flip it to in a simultaneous close.  He buys from you and sells the same day to a buyer for more money (called a spread).  Often they are going for a 20% spread!  Does that sound like a better deal than a real estate commission?  Worse, he may fail to find an end buyer and walk away leaving you hanging without time left before foreclosure.

  2. A Real Estate agent is motivated to sell your home for as much money as possible for THREE reasons.  1.  The commission is higher (but nothing compared to an investor spread).  They are going to make more money if they sell it for more.  2.  It is their legal statutory duty to sell your home for as much as possible and help you get the most net profit or least loss as possible.  It is LAW.  Real Estate agents are regulated, unlike "investors."  Realtors® are required to follow a rigid code of ethics  and are required to take continuing ethics training.  While it is true that some agents do not have hundreds of home sales experience I do, all but one of my agents does and all agents are supervised by a Broker who looks at all contracts and doesn't have years of experience and training.  The commission saved isn't going to you!  It goes to the investor.  Do you think an investor is going to show you comparable home sales that are high?

  3. The investors know that a high percentage of home sales are foreclosures and short sales and they know they have to compete with those prices so they have to get your home for even less.  If you are going to have to do a short sale I almost guarantee you that they are going to want to be the negotiator with your lender and they are going to try to get it for the least amount possible. There are consequences of a short sale.  While it is true that you may have less credit damage than going into foreclosure there are some reasons to get as much money as possible.  If it is an investment property the IRS can tax you for the amount less than loan value.  If it is your primary residence this shouldn't happen.  Investors and even uninformed agents tell people the MUST miss payments to do a short sale.  That is WRONG!.  While a short sale may do less credit damage than a foreclosure missing payments will hurt and the more you miss the more it will hurt.

  4. The reason I won't buy your home is because I know that the only way to make a profit is to buy it for so much less than it can be sold for that I can't do it for ethical reasons.  I am bound by the Realtor® code of ethics and Idaho statutory law to do diligence for my clients.  We CAN'T ethically or legally purposely do a double deal.  That is what every "investor" I have had talk to me about finding short sales and helping them wants to do.  They want a contract to buy for an inordinately low price and at the same time keep the home listed to find an end buyer who will pay more and they get the "spread".  They often do a simultaneous purchase from you and a sale to and end buyer at the SAME TIME!  This is essentially arbitrage.  And you more than likely will not have any idea what the spread is! The spreads that I see are a lot more than a real estate commission.  When I have talked to "investors" trying to get help doing this they are looking for a 20% gain and have "enticed" me by offering to split it!  So why won't I do it?  Although legal for an investor it is illegal for a Realtor® to do it without disclosure to you and it is unethical.  Usually with a short sale the lender will pay a Realtor 5%, sometimes 6% and that is split with a buyer agent most of the time.

I am not saying that all real estate investors are not honest.  I am saying that they are not regulated.  They are doing it for profit as I am as a real estate Broker.  But we operate with different rules.  Realtors® are regulated. All charges and any profit that a Realtor makes is made by a commission that you agree on and in the case of a short sale the lender pays it and it is all transparent.   When an investor buys and flips your home you have no idea how much the spread is.

One of my agents as well as I have special training and experience in doing short sales. We will not give you legal advise. and in fact before you consider doing a short sale you should go to the Idaho state bar attorney website and consider using the online referral service. http://www2.state.id.us/isb/lrs/lrs_search_panel.asp

There are situations when using a soliciting investor may be right for you.  Here are some situations I can think of.

  1. You do not owe more than your house will sell for. 

  2. Your home is very old and or needs a lot of work and you have to move fast and are willing to sell at a large discount.  Time is money.

  3. You should know exactly what you are doing.  You should call a Realtor® and get a brokers price opinion.  Tell the Realtor® what you are considering.  Don't take advantage of him or her.  Tell the Realtor® why you want it and if fact why not offer to pay for it?  Know what you are doing and what you are paying for.  Know that an "investor" is trying to make a LOT of money buy buying your home.  He is taking a significant risk in this down real estate market.  You can bet the reward that he is going for is either a lot or he is not very informed.

Investors can really mess you up by tying your property up so you lose precious time finding an end buyer, only to walk away before closing and let you get foreclosed on.   If they do close you may still be liable for the difference between the sale price and the amount you owed.  If it is an investment property and not your residence the IRS can tax you on the difference between what you owed and what the lender accepted and forgives you.  Be informed and know all the ramifications of what you are doing if you sell to an investor directly without an agent, especially if you are in a short sale position. 

If you get a call from an investor or considering contacting one please call me.  I would love to talk to you.  I would love to help.  Call Jon Gosche at 208-870-2115.