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What Constitutes FRAUD In Real Estate?

On March 31, 2009 / By Real Estate Law Help / In Real-Estate-Law-Terms

I am wondering why some very intelligent individuals consider real estate investments Fraudulent? When in fact SIMULTANEOUS CLOSINGS take place in this Great Nation EVERYDAY. I guess if there are parties involved who would OVER-INFLATE PRICES of properties, FALSIFY DOCUMENTS to make a buck, would be considered as a FRAUDULENT ACT. The individuals who do so should get what’s coming to them (A 6×9 cell with BUBBA). However, when a Seller is willing to accept an ALL CASH OFFER without any contengencies, other than a 30 day close. The seller has no interest in the property once the Closing Statements and other documents have been signed and notorized. There are NO laws ANYWHERE that states a property sale must involve an appraisal, survey, or any of the other CONTINGENCIES that many uneducated individuals in the industry think there are. Unless you want to consider a Lead Based Paint Disclosure as LAW, simply because someone else SAID SO. That’s why most all investors hire a highly qualified REAL ESTATE ATTORNEY and ONLY a REAL ESTATE ATTORNEY, and NOT their Brother-In-Law. Because they have paid their dues through the high cost of education, and IN DEPTH knowledge they have acquired by actively providing closings with ONLY verified numbers every step through the process of the SIMULTANEOUS CLOSING< BACK2BACK CLOSING, DOUBLE CLOSING, or which ever term someone wants to tag it. By the way, what constitutes a purchase and sale of any property anyway? Other than a SELLER accepting the Price and Terms that a BUYER is willing to pay. Or maybe Common Sense has escaped this current society. And if so, then we are all doomed to participate in the REAL ESTATE INDUSTRY by the precepts of SOMEONE SAID SO. Instead of educating ourselves to the ACTUAL GOVERNING LAWS which we must all operate within, how unfortunate. So, in the event there are still some folks who know of Private Money Lenders, and where many INVESTORS can locate these individuals, feel free to answer. I still am not required by any LAW, to be licensed, in order to SELL my house whenever I choose, to whomever I choose, or do I ?

« who can answer this legal real estate question ?
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7 Responses to “What Constitutes FRAUD In Real Estate?”

  1. Ann_A said:

    Mar 31, 09 at 1:40 am

    Anywhere a signature is required and the truth is not told is fraud.
    Many fraud go unchecked Simply because there’s too much of it going around.

    For example in the case of Countrywide, even the CEO is been investigate for fraud, which does not surprises me because I know some of the guys that work at my local Countrywide office and they were committing fraud every day. They would often joked about buying white-out by the gallon.

  2. tabulator32 said:

    Mar 31, 09 at 4:07 am

    Totally dependent on state, county and city laws an ordinances.

    Unless you choose to disclose that information, no on here would be able to say for certain.

  3. pendleton4068 said:

    Mar 31, 09 at 8:29 am

    call real estate board in your state ?

  4. I_Buy_And_Sell_Houses said:

    Mar 31, 09 at 12:58 pm

    I’m not quite sure what your question is.

    Pretty much everything you state is accurate. A real estate transaction can occur between two individuals without any involvement from real estate agents or others. So long as the two reach an agreement, and both are capable of legally signing a contract (mentally competent, above a specific age, etc.), it’s legal

    No, you’re not required to be licensed to sell your house.

    There’s plenty of private money and hard money out there. Go to http://www.creonline.com — a good investor web site — and find the local real estate investment clubs in your area. There will be plenty of hard money lenders involved with each.

    You’re right that there are no laws requiring appraisals, inspections, etc. However, even many/most investors do some of those. Not because it’s required by law, but because it makes sense. As an investor, I may THINK a property will sell for $350,000. But if I’m using hard money to buy the property, the hard money lender will insist on an appraisal. And I’d want to get an inspection to determine just how much rehab work is required. Again, not the law, just common sense.

    Not sure if I’ve answered your questions.

    Hope that helps.

  5. TX_Little_Girl said:

    Mar 31, 09 at 3:27 pm

    I think its against the law to not sell the property to someone based on religion, sex, ethnicity. I think that a survey should be done by the buyer only to protect themselves…Sad to say I wish there were laws because even realtors just have to follow their "code of ethics" (I lost a lot of money financially and I could not do anything in regards to the realtor that sold the property, all she pretty much did was tell me when the closing was, never advised me or anything)….

  6. nusias9 said:

    Mar 31, 09 at 3:27 pm

    I agree you can execute a cash sale without contingencies.. Agents are the devils children!

    However, the buyer has a right to lead paint pamphlet, title search, disclosure (if required by the state).. If the state requires fire/safety certification you will have to get this as well..If the title/deed comes back with lien(s)… then you have to clear the deed.

    You still must allow the buyer due diligence to inspect the property even though it might be an as is sale.. They have the right to back out if there are major foundation issue which you failed to disclose…

    You can sell your house without an agent.. Although to protect yourself you should use an attorney to execute the contract.

    Some states require an attorney for this process (example:NJ)..
    I have sold and bought 4 condos without agents in NJ..
    WHY should anyone pay these people thousands of dollars for services you can do yourself! I have saved myself almost 200K in agent fees doing it myself…

  7. loanmasterone said:

    Mar 31, 09 at 5:28 pm

    You are not required to have a license to sell your own inventory, however the IRS will declare you a dealer if you sell more than a certain number each year. I think that number is 4-5. Since we found out this tidbit of information, we decided to form a corporation to purchase property with.

    With the corporation the cost was not expensive and we can do several things in buying property as well as W-2 ourselves as employees of the corporation.

    We also use a double closing on some occasions to accomplish our goal of buying in one escrow and selling in another escrow.

    We have a real estate attorney on call, but not on our staff at the time. When we first started out we did not have the funds to hire an attorney, so we went with what we knew and the knowledge we had learned over the years of being in the real estate field.

    This Lead-Based Paint Disclosure statement is required by Federal Law when selling a residential housing built prior to 1978. If the house was constructed "PRIOR" to 1978, this form is "REQUIRED" to be completed and signed by the seller and buyer. If the dwelling was constructed in 1978 or later, this form is not required. If in doubt about when the construction took place it is wise to use the disclosure form. When ever the disclosure form is use, the seller must also give the buyer the EPA Lead Pamphlet.

    You are right on with your assessment of real estate investment.

    There are too many real estate deals that are ligit to commit fraud and possibly a heavy fine and jail time as well. I have no desire to be where I can not freely go where I want to go and when I want to go.

    You might find many lenders if you google Hard money or go to wierdloans.com

    I hope this has been of some use to you, good luck.

    "FIGHT ON"

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