How predatory wholesalers can prey on Utah homeowners
SALT LAKE CITY — If you are selling your home in this market, you would expect to make money – not lose it. But an emerging scheme can leave homeowners trapped in a bad contract that can cost them thousands.
In this hot housing market, real estate professionals are working hard to drum up new business and claim their commissions. But it is also bringing a more sinister scheme to bare, says Erik Bildman.
“There’s a lot of people out there that are trying to take advantage of sellers,” he said.
Bildman is a vice president and general manager at a company called Sundae, a real estate marketplace that connects people looking to sell a home that maybe needs some work with investors looking to buy and flip those homes.
“The distressed properties — the properties that need a lot of work,” explained Bildman. “Those are much harder to transact.”
Because of that, Bildman says there has been a surge in what is called predatory wholesaling. A buyer makes an offer to someone who is desperate to sell quickly, then the buyer strings the homeowner along as they try to get the homeowner to knock the price down by claiming the home needs massive repairs. And because the house is under contract, the seller cannot simply walk away. So, those homeowners wind up lowering the price, or even sometimes paying to close the deal.
“They’ll try to point out anything and say that it needs replacement or work when it doesn’t necessarily need repairs,” Bildman explained.
According to Sundae, the average amount home sellers lose to predatory wholesalers is more than $17,000.
To avoid a predatory wholesaler, be sure you read and understand all the terms of a contract before you sign.
You should know your home’s value before signing any contract.
And if you are able, get multiple offers on your home.
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