PHOENIX (3TV/CBS 5) - It's not buyer beware, but "seller" beware, in the latest warning from the Maricopa County Recorder's Office. It’s not a scam, per se, because it’s not necessarily illegal.
In the hot real estate market, most sellers can sit back and watch buyers fight for the chance to buy their homes. Some quick buys, however, are leaving sellers with way less than they could have made. “We would just encourage homeowners to be careful, to do some research both as to the nature of the buyer and as to the value of their property," Maricopa County Recorder Stephen Richer said.
Median home prices in the Valley hit a record in March with the average of homes selling that month at $359,300.
There are investors who seem to be targeting the elderly, the low-income, and those who are about to enter foreclosure. The buyers make a low-ball offer the seller often accepts out of desperation. Attorney William Kozub calls them equity skimmers. “They will make a purchase offer just above the amount to clear the loan, and in essence they're skimming all of the homeowner's equity out of the deal,” he said.
"Even if that valuation might sound considerably higher than what you bought your home for, home prices are rising so much in Arizona that it might be considerably below market,” Richer said.
The shady investors are usually individuals – not companies – that you can’t find listed with the BBB. What they’re doing isn’t even necessarily illegal. “As long as it meets the statutory checkmarks, our office is going to record that,” Richer said.
Kozub is representing an elderly widow who is taking care of her disabled son. She thought the investor who came to her door, was going to help her through the troubled waters of foreclosure. “In reality, what he did was slip the purchase contract in front of her, had her sign it, and immediately proceeded to sue her to kick her out of her house," he said.
So, the Recorder’s office warns, don’t let an urgent need for cash get in the way of your home’s full value in this historic seller’s market. "There are a lot of predators out there and you need to be very careful about what you're signing," Kozub said.
Some of these transaction could be illegal if there was fraud or coercion involved. Richer says that’s a matter the Attorney General’s Office would take up.