If It Sounds Too Good to Be True…
You know the saying… if it sounds too good to be true, it almost always is. Unfortunately, the real estate industry has its fair share of scammers, whether on the mortgage front or slick tricks for conning property buyers.
Because Florida is a popular choice for people looking to purchase a second home, there are a few bad guys our there trying to swindle the vacation home buyer segment.
Here are some tips to help you stay away from the bad guys, ensure your property shopping and buying experiences are happy ones, and that your next purchase is one you will be proud to have completed.
- Be cautious about interpreting property values that are published on the Internet. Some home valuation sites can be helpful in getting a ballpark figure, but they are typically not up-to-date and they might be showing manipulated data. Use an independent human resource (your agent or an appraiser) to present you a qualified opinion of a property’s value. That human being will also provide you the facts behind the valuation so that you know it’s not smoke and mirrors.
- Run, don’t walk, from anyone who says the property is “guaranteed to appreciate.” There is no such thing as guaranteed appreciation in real estate. Property values fluctuate over time.
- Hire a real estate agent to look for homes and represent you. Don’t contact a builder, talk to the representative in the model home, or contact an anonymous person selling real estate online. In those instances, you do not have anyone representing your interests.
- Get help with contracts. Standard builder and developer contracts can be very one-sided in their favor and there will be pressure to sign while you are emotionally in love with the property. If you have a real estate agent working for you from day one, they will represent you in negotiations with the builder or developer and ensure that you have adequate safeguards in the contract.
- So much to feast on, it smells funny? It can be appealing to consider buying an investment property that offers soup-to-nuts services included. Some scammers offer to do everything for you after you buy… paying your mortgage, taxes and dues, finding tenants, collecting rent, managing repairs, and more. But that scammer might disappear after your closing, leaving you without resources for managing the property. There are certainly many reputable property management firms and brokerages that are full service and stick to their word. Check references and have your buyer’s agent look into the entire situation.
- Unless you are familiar with the neighborhood or development and you are working with an agent that you trust, be careful about buying sight unseen. This is especially true if there is pressure to BUY NOW of if there is flimsy rationale as to why you should not to view the property in-person. Buying sight unseen is not always risky. For example, suppose a condo in one of your favorite developments (one that you or a friend has visited) becomes available and has all the ingredients you’ve been looking for (the view, the floor plan) but you are unable to travel to inspect the unit. Your real estate agent can present a contract to the seller that protects you, even though you’ve not seen the property.
- Always have a professional inspection prior to closing. While doing an inspection is the buyer’s choice, be wary of any seller that suggests an inspection is unnecessary. Even on new construction, you’ll want a professional’s report on the property’s condition.
For most people, their second home is a dream home and is one of the most rewarding investment and lifestyle decisions they ever made. And it can be for you too. Be wary of anything that sounds too good to be true, work with an agent to look out for your best interests, and you’ll be on your way to that dream home and the lifestyle you deserve.