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I’m seeing amazing real estate prices in L.A?
June 26th, 2009 by Dirtguy | Filed under Renting & Real Estate.
DeeGreen asked:
There are tons of ads for homes that have been defered to the lender. How does one detect a scam? I know the current market is crazy, but is $2000/mo. for a 3 bedroom, rent to own, no credit check, no money down likely to be BS? I want to be in a loft within 2 miles of the beach in LA. Is it possible for a working student? Should I believe what I am seeing?
property for sale
There are tons of ads for homes that have been defered to the lender. How does one detect a scam? I know the current market is crazy, but is $2000/mo. for a 3 bedroom, rent to own, no credit check, no money down likely to be BS? I want to be in a loft within 2 miles of the beach in LA. Is it possible for a working student? Should I believe what I am seeing?
property for sale
Tags: Current Market, Loft 2, Money, Property For Sale, Real Estate Prices, Rent
I would not be surprised to see prices like that in California. California is suffering some of the biggest drops in prices and home loan defaults.
You should be able to check the property-tax records to see who owns the property you’re being shown. That should tell you most of what you need to know. If there’s a lienholder on the property, it may be close to foreclosure and you should steer clear; if the offer comes from a bank or an agent for a bank, you should be solid.
Lots of property is on the market at fire-sale prices because owners are walking away from underwater mortgages. If you can rent to own and have no obligation to buy, it’s like having a “call” option on a stock: you’re paying for the right to buy, and you can walk away from it if prices fall further.
No credit check, no money down…you should be wary. That’s what got us into this mess to begin with..”creative financing”.
That example you cited certainly sounds possible. I know plenty of investors who are active in LA, doing lease-options and land trusts (which can be structured similar to a lease-option).
Just protect yourself. Make sure the property you’re renting (or lease-optioning) doesn’t head into foreclosure. It’s too complicated to get into here, but if you’re lease-optioning, you want the owner to sign a document that gives you the right to check on the status of his mortgage with his lender. If you go with a land trust, and you’re the resident beneficiary, you should have the right to “audit the books” whenever you want.
Hope that helps.
Very likely a lot of B.S.
Looks like a desperate homeowner trying to get at least a renter in to catch up with the mortgage payments.
Stick with a Realtor if you want to buy a house. Even REO’s (Real Estate Owned = Bank Owned) houses are usually listed with a legit outfit, aka Real Estate Office.
If you really want to deal with such an outfit as you describe then you should bring the contract home first and show it to a lawyer specializing in Real Estate… before you end up a renter that believes he will own a house one day…. and are just being fooled paying rent until the bank kicks you out of the house because foreclosure is looming and you find that you have no claim on the property because you are not on the title and/or mortgage.
It’s tricky. There may be other lenders with an interest in the property where owner took multiple loans out on a property. You will have some serious issues down the line if that is the case.