The City of Austin recently passed a resolution to "educate homeowners who could get taken advantage of by low offers, with the promise of quick turnarounds."
According to this story from KXAN, "The resolution will provide resources for homeowners, many elderly and low-income families, who the city says investors prey upon to sell their homes, "through high pressure, deceptive, and/or exploitative tactics." The same people who may be struggling to stay in their homes to begin with."
The resolution calls on the city manager to launch an educational campaign including:
Email I sent to the reporter:
"Ms. McGivern,
Regarding your story of April 26, 2018, you only showed one side of the story and completely ignored the other.Where does city council speak with these heinous "flippers"?There are already statutes and regulations regarding fraud and deception in real estate transactions.Educating people who want to be educated is fine, but if a governing body restricts the pool of ready and willing buyers, more properties will go to foreclosure and sit on the market longer.
Real estate investors perform a vital function in every jurisdiction: putting properties back on the market, in good condition.Many of the properties they buy could never pass conventional lender's inspection because they typically require tens of thousands of dollars in repairs that most homeowners do not have or cannot do themselves.Additionally, many real estate investors near metropolitan centers can access almost an unlimited pool of funding to buy and remodel properties if the numbers work.From contract to close, the time can be in as little as 3-4 business days.The delay is mostly waiting on title companies.So when flippers mail letters and post cards to owners saying they can "close quick" and "all cash", that is a fact, not fraud.
Of course, realtors will recommend you list your property – that's how they make money – so they are self-interested, which makes the report biased.Maybe next time you can have a "flipper" on you show for balanced reporting.
The idea of anyone feeling "pressured" by getting a post card or flyer is ludicrous.If the homeowner doesn't want to sell, the solution is to throw them away.But the idea of "there ought to be a law" is equally ludicrous.If there are bad actors committing fraud, the answer is to enforce the laws already on the books.
Out of all the properties posted for sale every 1st Tuesday of the month at the trustee's sale, a very large percentage never make it because they are bought by the very flippers you disparaged.If not for the real estate investing community, cities around the country would look much, much worse.My biggest complaint with your report is that you completely failed to get the rest of the story.Your editor needs address this."
Great news I hope more cities try and educate people, I cannot stand the idea of someone walking into an elderly person's home and telling them this is the most I could pay for this house when it's truly not. If someone is in a situation of need, has an immediate problem I understand why they need cash fast. I have seen people just lie and tell an elderly person there house is only worth x when in reality we all know it's worth much more than that but they need to make a deal.....Perhaps I am losing out on deals but I only have whole saled properties that were bank owned and purchased by me already.
Email I sent to the reporter:
"Ms. McGivern,
Regarding your story of April 26, 2018, you only showed one side of the story and completely ignored the other.Where does city council speak with these heinous "flippers"?There are already statutes and regulations regarding fraud and deception in real estate transactions.Educating people who want to be educated is fine, but if a governing body restricts the pool of ready and willing buyers, more properties will go to foreclosure and sit on the market longer.
Real estate investors perform a vital function in every jurisdiction: putting properties back on the market, in good condition.Many of the properties they buy could never pass conventional lender's inspection because they typically require tens of thousands of dollars in repairs that most homeowners do not have or cannot do themselves.Additionally, many real estate investors near metropolitan centers can access almost an unlimited pool of funding to buy and remodel properties if the numbers work.From contract to close, the time can be in as little as 3-4 business days.The delay is mostly waiting on title companies.So when flippers mail letters and post cards to owners saying they can "close quick" and "all cash", that is a fact, not fraud.
Of course, realtors will recommend you list your property – that's how they make money – so they are self-interested, which makes the report biased.Maybe next time you can have a "flipper" on you show for balanced reporting.
The idea of anyone feeling "pressured" by getting a post card or flyer is ludicrous.If the homeowner doesn't want to sell, the solution is to throw them away.But the idea of "there ought to be a law" is equally ludicrous.If there are bad actors committing fraud, the answer is to enforce the laws already on the books.
Out of all the properties posted for sale every 1st Tuesday of the month at the trustee's sale, a very large percentage never make it because they are bought by the very flippers you disparaged.If not for the real estate investing community, cities around the country would look much, much worse.My biggest complaint with your report is that you completely failed to get the rest of the story.Your editor needs address this."
Government is not all bad, all the time. When there are bad actors in the marketplace, people need government to level the playing field. See, generally, predatory lending, securities fraud, "company towns" (especially up in your neck of the woods), and environmental regulations.
This, on the other hand, is government looking for a problem (mostly because a council member got postcards and letters.
The predatory house flipping is a real problem in Austin. I have family who live in Central Austin, and they receive letters weekly by companies threatening them and trying to scam them out of their houses. The worst thing is that they are not alone in this. Many of their neighbors experience this too. This is not the City of Austin trying to make an issue, this is a real problem.
An issue like that might be tackled more appropriately by a non-profit rather than the govt.
A wholesaler saying "The most I can pay is $XX,XXX" is not fraud. That may be the most they can pay and feel certain they can make a good return in the short time frame they might have to find a real buyer.
There are nonprofits who already provide outreach and education to lower income buyers. This would seem a logical extension of that to educate and counsel sellers who are vulnerable to being taken advantage of.
There was a post here a couple of years back with a guy bragging how he and his brother, ex-neighbors and “friends” of an elderly hispanic couple, made 10k on finding a buyer for the couple’s 1970’s mobile home on a lot in Round Rock. They paid the couple 50k and pocketed 10k....much higher than even the standard 10% commission that lots command (but buyers actually fixed up the trailer and now live there so 6% is usual). The wife did not speak English much and they were by no means affluent. With those kind of “friends” who needs enemies? By the way, one brother was a realtor.