HomeVestors Knows That Beginning Investors Need To Watch Out For Common Scams

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Become educated on some common scams in the real estate industry in order to side step any unnecessary problems.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows that many beginning real estate investors look for help from mentors and some end up getting scammed because they don’t know the industry. It is important for beginning investors to obtain a wealth of knowledge and know the common scams that circulate the industry so they don’t end up becoming a victim.

Knowledge is king in the real estate industry and those that understand what they are getting into don’t get coerced into deals that sound too good to be true. Beginning Investors on the lookout for common scams should stay clear of others who are promising something for nothing.

The most common scam in the industry is the forgery of documents. Beginning investors need to check each document carefully and make sure that the person selling the property is the same person who is on the title. Always hire a title insurance company who can verify that the title is in fact, correct and legal.

Beginning investors who are investing in empty lots in rural areas should make sure they are getting all that is promised. Another common scam involves selling a lot and convincing a buyer that they will be receiving utility service when this is in fact, not true. The seller charges a premium for this false advertisement. Be sure to verify any future utility service with local officials.

Always see the property before buying it. Many investors start their property search online but shouldn’t end it there. After viewing a property online, take a trip to see it in person. A common scam involves putting a fake property online and convincing someone to purchase it. They are then asked to wire the money to a certain location and will in turn mail the keys and title. Obviously, the seller doesn’t end up mailing anything and keeps the money for him or herself.

When securing funding, beginning investors need to find out how long a “fixed rate” mortgage is actually fixed for. Some unscrupulous lenders only have the rate fixed for 30 days and a buyer is astounded by the increase in their mortgage when the second payment is required.

When lenders advertise low rates, find out if they are payment rates or interest rates, as they are completely different. Be sure to understand all the fine print, including the fees for processing the loan.

Beginning investors who can stay away from these common scams should be able to start in the industry without falling prey to scam artists.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.

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