Peter Holland: If you see a house that's sold for $20,000, and they're now asking $100,000, that's a huge red flag.
Steve Millstein: Because that might be considered what's called a flip, or a transaction where the purchase price is being artificially inflated, and you might be getting ripped off.
Steve Lovejoy: Buy low, sell high, that's how you make money. Isn't it?
Steve Millstein: Let's say that I buy a house for $100,000, and I want to sell it to you for $250,000.
Steve Lovejoy: There is really nothing wrong with that, unless the value of the property really is lower than you're telling the lender.
Steve Millstein: Unscrupulous people will buy a house, make minor cosmetic repairs, and they'll then flip it to an unsuspecting buyer for a much higher price.
Irwin Kramer: They just don't lie, but lawyers can figure, and that's what often happens in a real estate flipping fraud scheme.
Steve Millstein: How can you say that a property that's sold for $15,000 is worth a month-and-a- half later, $70,000.
Irwin Kramer: It's the appraiser who is willing to say, that these higher price properties are comparable, when in fact they are not, as the means of artificially and fraudulently inflating the price.
Steve Millstein: And then we are going to use that appraisal to induce your lender to loan you way more money than that house was ever worth.
Irwin Kramer: There are many red flags that might clue you in, that you may be a victim in a real estate fraud case.
Steve Millstein: When it seems like it's too good to be true, often times it is. If the lender tells you, you are going to have to bring money to the table, but the seller, or the seller's agent says, don't worry about it.
Irwin Kramer: I know that you don't have $10,000 at the bank right now, so I am going to give you that money at the settlement table, just be between us.
Steve Millstein: It's a good indication that they are trying to lead you down the path of what I would call some type of a fraudulent transaction.
Irwin Kramer: They are doing it, so that you look like a person with the means to buy a house that is valued far in excess of it truly ought to be valued at. If you are asked to sign a blank loan application. Oh, just sign it, we will fill in the rest later. That seller is going to fill in inaccurate income information, to make you look more credit worthy.
Steve Millstein: Is the person who is offering to sell you this house, not the owner of the house.
Irwin Kramer: He is going to get it from Joe the same day, and then flip it over to you.
Steve Millstein: Someone is going to be misrepresenting to someone else, what's supposed to be taking place here, and you are going to find yourself the party to fraud.
Irwin Kramer: If you see any of these signs, you need to be very careful, back away from the table, see an attorney, get the facts to see if this really is too good be true or not.
David Pisanic: If you don't know how the system works, you are not going to do as well.
