The Ugly House Scam

Or sometimes called the
We Pay Cash For Houses Scam.

When a home goes into default the first thing that usually happens is what is called "Deferred Maintainence".

• The lawn goes unmowed.
• The house needs paint.
• Windows need replacing.

The Pride of Ownership may be at an all time low.
That's when the Real Estate Investor steps in.

They give you a lowball offer to purchase your home.
The hook might be that they are offering CASH!
No Real Estate Agents are to be involved.
"Their commissions just steal away your profits".

It's a low offer - but he did offer CASH.
He tells you he needs to transfer the money and needs ______ time.
It's still a CASH offer, you need CASH, he's a nice looking man, you can't fix the place up yourself for lack of time, energy, or money, so you sign.

He's already placed ads in newspapers, in craigslist, pretty much anywhere and everywhere.
"Contractor Special" Bring Your Hammer and Make an offer!

The fine print is that he owns an option on your home for the period stated in the contract.
He owes you only what the contract states and only if it closes within the specified time frame.

Now he's trying to sell your home. He doesn't own it, but he can sell it.
Each offer he accepts on your home comes with a $1,000 deposit.
The offer states the "Contractor" has to close within 7 days.
If it doesn't close in a week, the $1,000 is his to keep.

One of two things will happen.

If the "Contractor" has the financing and is able to close on time, the sale will be recorded.
You'll have to move, and demolition will start immediately.
The purchase price of your home doesn't matter as the Real Estate Investor owns the option on your home.
He pockets the difference between his lowball offer to you and the sales price to the "Contractor".

If the "Contractor" doesn't have the financing and isn't able to close on time, - the Real Estate Investor pockets the $1,000 and moves to the next "Contractor".
The Real Estate Investor hopes to collect as many deposits as they can during the time specified on your contract.
If at the end, he doesn't sell your house to a "Contractor" he walks away.
You are left at the same point you were before, just worse.
Rule Number One: NEVER sign your Deed of Trust over to anyone!

Read "The Benefactor Scam"