Prospective real estate investors may have heard, or experienced unusual selling pitches or come-ons, like offering buyers the chance to learn how to become a real-estate investing millionaires, by offering dubious rates, extra perks or add-ons.
Be on the lookout for the scamming real estate broker. However, not all real-estate investing seminars, or brokers are bad bets, of course. There are many who will help you learn about the business of investing and can be a worthwhile expert to ask for reference.
Recently, the U.S. Federal Trade Commission has issued advisories to consumers for them to be suspicious of claims that money can be earned fast, and investment growing rapidly high in short terms, despite lack of experience, and that making money using the flawed broker’s formula is not truly a sure thing.
The number of seminars offered by real estate brokers to would-be property investors has exploded along with the booming real-estate market. These seminars are distinguished from professional or academic courses that focus on specific topics, such as real-estate demographics.
It isn’t unusual to see ads for public seminars promising to teach you all about the art of buying real estate, like just in three days. Such seminars often usually free, and are intended to entice you to pay for additional knowledge at future conferences.
The real estate agents have a valuable source of potential deals for the real estate investor, in the Multiple Listing Service database. However, be wary that only real estate agents have a monopoly on this information, so keeping tabs on such list may be a necessary part of an investor’s game plan.
Properly dealing with real estate agents can be difficult as an investor. Most agents would prefer home buyers with cash to put down, good credit and conventional buying power. Their main interest is getting a commission with a few hassles as possible. Most agents have never done a creative real estate transaction with an investor, so they are not often receptive to unusual offers. Most agents equate a nothing down offer with a buyer who is not serious.
Here are a few tips on keeping a keen eye on scamming brokers.
Stay clear of the bully, uncooperative broker types
If you cannot speak softly to a overbearing broker, don’t be afraid to stand up to him. Some brokers are unethical and often refuse to present your offer. In addition, many times the broker will lie and tell you that your offer was rejected when, in fact, it was never presented. If this happens, do not be afraid to go over his head to the listing broker. If the listing broker is uncooperative, deal directly with the sellers themselves, and skip the middlemen.
Offer a short closing date to your broker
Another way to get an agent to take you seriously is to offer a fast closing time. Nothing makes an agent drool more than the thought of getting a commission check in ten days. If the agent has another offer presented to him, he will usually advise his client to take the offer with a larger earnest money and faster close than an offer which is higher in price.
Insist on doing your own computations
Sometimes you will get the other end of an uncooperative agent, that is, an overzealous broker. Be suspicious of any broker who tells you what a deal you are getting on a property. Should it be a good deal, then why didn’t he buy it? Don’t take the broker’s word as to the value. Ask for printouts or info on comparable sales.
Be aware that information contained in the MLS database was entered by the listing broker and may be falsely inputted. If a comparable sale shows the same square footage as the house you are looking at, try visiting the area to see if it truly is accurate. Do your own assessments of property values.