I am interested in purchasing a home. What types of home purchase traps or scams should I avoid before even signing a purchase and sale contract?
Some dishonest investors pretend to sell houses rather than renting or legitimately selling them. By overpricing the house and setting the monthly payments just beyond the buyer’s ability to pay, the seller ensures that the buyer will default, lose the house and forfeit the down payment. These sellers typically use one of three methods to accomplish their goal: lease with an option to purchase, contract for deed or wraparound mortgage. While these were legitimate sales methods in the past, they have become the tools scam artists use to separate unwary homebuyers from their money. The lease with option to purchase is the most common home purchase scam. Suppose you want to buy a house but cannot qualify for a mortgage loan. The seller makes you a deal: pay the down payment up front, rent the house for a specified time (usually a year) and in the meantime find financing to purchase the house. Usually the rent is overpriced but you’re willing to pay because you think you’ll own the house i
