"Property flipping" involves purchasing property, increasing the value of the property through improvements (e.g. renovations or landscaping), and reselling the property within a short period of time. This is a common practice within the real estate industry. Although it involves significant financial risks, many people make a very decent living through the legal practice of "property flipping."
Property flipping can contribute to the rejuvenation and restoration of distressed neighborhoods. The process of rejuvenation and restoration may attract new residents and businesses, create jobs, and increase revenues for local governments through higher property taxes. However, rejuvenation can also raise the cost of living in an area, which may force long-term residents to relocate.
Illegal property flipping occurs when the flipper inflates the sale price without making any actual improvements on the property. An appraiser is often involved in the scam by valuing the property much higher than its actual worth. The ultimate buyer is usually unaware of the scam.
Scammers target victims who want to own a new home but believe that they cannot afford to buy a home or qualify for a mortgage loan. Scammers will often promise to place the victims in a home and arrange a mortgage loan despite their poor credit or little money.
To avoid being a victim of a property flipping scam, you should always hire an independent appraiser to determine the value of the property. In today’s unstable real estate market, it is difficult to understand the true value of a property without the help of a qualified professional.
The following warning signs may indicate that the price of the property does not match its value:
Also, the following warning signs may indicate that the mortgage loan is fraudulent:
If you think you are victim of a mortgage loan fraud, consult a lawyer. An experienced real estate attorney can determine whether you have been the victim of mortgage loan fraud, preserve your rights and remedies, and recommend a course of action.
Last Modified: 01-03-2014 11:59 AM PSTLaw Library Disclaimer
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