Expert: Karyn Foley - 9/30/2009

Question
Ok due to harassment from our neighbors we've wanted to move but didn't have the money so recently we met this guy that apparently will pay off our house and then put it on the market and then when it sells he gives us the money which we pay abck to buy a new house but it seems a little to good please help if you can.

Answer
Dear Alex:  There are many real estate companies that buy a house from a desperate owner and then turn around and sell it.  Those companies always buy low because they end up having carrying costs and may end up having to sell it for less than anticipated.  They need to make a profit - after all, it is a business for them not a favor that they are doing for you.  Thus, you usually have to sell it for less than you would sell it to a person who is going to occupy it as their residence.  This is a legitimate situation, even though the original seller takes the immediate cash quicker than he might on an open market situation.  The scenario you are telling me sounds very dangerous.  Why would anyone "payoff a house" to a banker, sell it, then give you any money?  Chances are this is a scam, where he tells you he is paying off a mortgage but is actually paying money to a bogus intermediary.  He would have to be an owner to sell it to somebody:  principals sign all real estate documents.  Then, when he gets the money he would probably disappear or not pay you what you deserve.  These types of people also are the kind one reads about in the paper who "rents" an empty house (that he doesn't really own), takes the money and runs.  The new tenants move in and find out that they weren't really dealing with the actual owner.  Strangers do not have anyone's best interests in mind except their own.  They are no good and you should beware.  In these hard financial times crooks are a dime a dozen.  We all have neighbors we don't like; mine lives right next door to me.  However, one bad neighbor sure beats ending up losing a lot of money!  Call a good real estate broker, as they an certainly sell it at a certain price, earn an honest commission, and you can move on.  If you learn that your house is not worth as much as would like or need to have in order to move, that will reinforce your knowledge that this "guy" was definitely up to no good.  It is a good rental market out there in many places.  Why don't you lease out your house for a year or two and move for the time being?  That would give you some space and distance from your neighbors and a new location and new horizon.  The market has picked up in some areas, and what has gone down will ultimately come up.  You might just have to wait it out a bit, then sell during better times.  Don't be foolish.  You worked too hard to be caught in a very bad situation:  this looks like a very bad situation.  Let me know what happens and how it plays out.  Also, any more questions or concerns I will be happy to answer.  Karyn Foley