Scams in Real Estate
Over the years, we’ve heard about many scams in real estate around Athens. The first one I remember involved a new subdivision that didn’t sell as well as expected. We noticed that a lot of homes were empty but new ones continued to be built. Because the subdivision didn’t appeal to me and I didn’t get requests to see the homes, I didn’t go there for a couple of years.
Around this time, I was preparing Broker Price Opinions reports for various asset management companies. I remember getting a request for a house in the subdivision with all the vacant homes. That wasn’t a surprise since it seemed likely that most of the homes would be foreclosed.
I went to the house and saw that it had been lived in, but was currently vacant. After looking around and taking photos, I headed back to the office to get my report ready. The report is much like an appraisal, but with fewer requirements. As a real estate agent, there are not as many restrictions on determining the value.
I started my MLS search and found that a few homes had sold in the neighborhood. The surprising part was that they sold for way more than they had been listed for. I was confused by this but just moved on to other sales that were more in line with what I believed the home was worth.
Over the next several months, I received requests for more BPOs and continued to see homes selling for higher prices. As an example, a home may be listed for $120,000 (usually withdrawn/not sold). The sales price would be $165,000, according to the tax records.
Scams in Real Estate In Athens!
Then one day, the news came out that several people were involved to close these homes with “straw buyers”. I guess real buyers obtained loans, but never took possession of the home. I still don’t understand how this happened or why a buyer would ruin their credit, but it happened over and over. There were many foreclosures in the subdivision.
I haven’t heard anything about this for several years but I heard that many of the people involved did not get charged. Unfortunately, scams in real estate are not as uncommon as we think. It’s always good to take precautions and work with reputable agents and closing attorneys.