As more people try to become Real Estate Investors, the amount of dissatisfied customers and Better Business Bureau Complaints rack up.
One of the most common complaints against Real Estate Investors is failing to follow through, or perform, with their Contracted Offer to Purchase a Home.
Here's a common Investor tactic that we've been seeing lately in the Phoenix Metro Investing Market.
Investor goes to a house and makes a very high offer. The Homeowner, having done their homework, accepts the highest offer they've received. Escrow is opened and planned to close in approximately 30 days. During that time the Investor is marketing the house to other Investors, attempting to assign the sale to another Investor for a $5,000-$20,000 assignment fee.
Many times the investor will start marketing the assignment of the sale at a very high rate. As the close of escrow gets closer, they'll begin lowering that rate. However, because their original offer was so high, there simply isn't enough room for profit for another Investor to pick up the house, invest in fixing all repairs and then reselling the house at Retail with all commissions, fees, title, etc.
If the Investor cannot assign the home by the Close Of Escrow, they simply cancel the purchase of the home and lose nothing. The result for the House Seller can be devastating. During the Escrow process, the Seller has been packing, planning on a new place to live, making arrangements for how they'll use the money they're expecting from the sale of their house. Perhaps they've purchased another home on contingency of the sale of their home.
At any rate, the Seller is now back to square one. Their house isn't sold, they're now responsible for another several months of mortgage payments, interest, utilities, etc. It's a bad situation all the way around.
In our 9 years of purchasing houses in the Metro Phoenix Market, Posted Properties hasn't backed out on one deal to date.
If someone gives you an offer for your house, before you accept, be sure to ask them if they will guarantee the purchase of the house, at the agreed upon price. Be sure to protect yourself as the consequences can be costly and very stressful.