We received this notice from the REALTORS Association of Edmonton while we were away. I know most of our readers would never fall for something like this but Renters should be aware:
Rental property scam
The bad guys have figured out another way to profit from a tight rental market. Apparently they are copying information about homes for sale from mls.ca and reposting it on Internet property rental websites. Potential renters can drive by the property to verify that it exists. The renters then pay a deposit to the scammer who provides a rental contract and invites them to move in. Of course, at the end of the month, the renter cannot get access to the property and the scammer has disappeared with their deposit.
If you become aware of this scam being pulled, alert the local police immediately with all the details you have available.
Why would anyone rent a place without seeing the INSIDE of it?
Why do people not do their own ‘due diligence?
Their STUPIDITY is their LOSS!
This is old news.
And not very relevant in today’s market.
Vacancy rates are reasonable.
A year ago, they werent. I moved here from Calgary Last July ’07 and I phoned 30 different property management companies before I could find an available 1 bedroom apartment. Ofcourse, I drove up to Edmonton and physically took a look at the unit before handing them a deposit.
But it’s true. You would have to be stupid in any market to fork over your money before even looking inside the place and conducting your due dilligence.
Hey guys,
I met a financial advisor today and I was discussing the fact we would like to keep our condo and move up pretty soon, but I was concerned the bank would not let us get a second mortgage.
A good friend of his is an investor that buys houses for cash. The house waslisted on MLS for $315,000 and he bought it cash for $275,000. Supposedly, the house was RECENTLY appraised for $330,000.
The advisor said the house is for sale for $290,000.
The trick here is that you have to pay the investor $1 and you own the house. Since you own the house, you do not have to get another mortgage to become the owner, you can refinance the house for the amount it was apraised for and pay back the investor.
Am I being a fool or it looks to good to be true???
Is there other strategies that would give us the opportunity to keep the condo as an investment and move up?
Thanks,
Really?….Is that all it takes?
If that was so easily done, you don’t think others would have done that a million times by now?
And you got this info from a Financial Advisor???? And we wonder why the markets are crashing all over the world.
Go talk to a banker and see what he says about this little scheme, after all, he is the guy you’re going to have to see about refinancing…ie “Mortgage”
Carllecat I’d love to know the answer to that question. Seems to easy to be legit, and almost smells of fraud, but who knows, it could definately be a loophole and one of those things that people never think of doing. (aside from still having to pay all your closing costs)
It’s a big risk though when you think about it for the investor. He’s banking on you actually being able to refinance the house when so many today are faced with not being able to refinance recently.
Why would you pay the investor more than the $1 that gave you “ownership” of the house?
Probably because he will put a lien for the remaining $289,999 against the title.
Now you are trying to get financing to discharge the lien.
Most likely, if the bank accepts the recent appraisal and does not insist on a new one, you will only be able to refinance 75% of the 330K, or 247.5K.
You better have the remaining 42.5K on hand.
Our bank, however, does a quick check to see at what price the house was last sold, which would be 275K. In that case, they would probably insist on a new appraisal, which might come in a lot lower than 330K . What then?
Can someone educate me on what it means to buy a house for “cash”?
As the vendor, do I really care whether the money comes from a mortgage or out of the buyer’s pocket?
I can’t see someone driving up with a trunk full of cash to close a sale. Unless you want to pull some scam, such as listing a lower sales price on the legal paperwork, to lower the capital gains tax on a second property.
My first rental was like this the house I bought was not to be shown. The yahoos that I bought from turned out not to like investors. But liked my money ?. My first tenant after only looking at the outside of the house paid the damage deposit $1100 and only saw the house on move in date. Later I asked him about that and he said after meeting me he had no worries. We met at a Tim Horton’s. I think it would be a great scam if you are a thief. Maybe if you are from Nigeria not that easy. Same thing when I show a place I always take a $200 deposit to take the application I guess they do not know that I actually own the property.