Protect your personal information. Shred all documents that contain personal information.
Get a referral for real estate and mortgage professionals. Check the licenses of the industry professionals with state, county, or city regulatory agencies.
Research recent comparable sales in the area and check documents such as tax assessments to verify the property value.
Review the title history to determine if the property has been sold multiple times within a short period. This could mean that this property has been "flipped" and the value falsely inflated.
People working in real estate should remember:
Be careful when you encounter a "flip". If the seller under the Contract of Purchase and Sale is not the same as the registered owner on the title, ask questions to determine whether the transaction is legitimate.
When acting for a lender and the buyer/ borrower in a "flip" situation, advise the lender that the transaction is a flip. Give the lender the amount of the purchase price under the original contract, and ask for further instructions.
If a large percentage of the mortgage proceeds are to be paid out to a borrower directly, or to parties other than the existing mortgagee or seller, make further inquiries.
If suspicions are raised, consider doing historical searches to see if the property has been flipped at higher prices or mortgaged repeatedly.
Scenario: You own your home and regularly pay your mortgage. Then why did you just get a phone call from a mortgage company asking you questions about the new mortgage that has been arranged?
