Record home prices in several Texas cities and increased demand in the real estate market all over the state can lead to headaches for consumers. If you’re in the market for a house, know the risks and protect yourself from scams and fraud. Buying a house is expensive enough – you don’t need to pay out more than necessary!
Here are some great tips to help you avoid scams and fraud associated with the hot housing market:
Avoid Living Trust “Kits.”
If you’re buying a new house, you probably realize it’s time to set up or update your estate plan. One popular way to do that is by a living trust. A living trust immediately transfers property to heirs after death. The key advantage to a living trust is that it does not have to go through probate, the legal process that takes place after someone dies.
If you decide to set up a living trust, steer clear of living trust kits that are marketed by phone or mail. There is no “one-size-fits-all” trust as each individual situation is different. An attorney can help you decide what is best for your situation and help ensure your property is protected.
“The benefit of a living trust is that the cost of transferring assets is paid for upfront, rather than after the person has passed away,” Steve Gonzales, a Round Rock attorney and member of the Texas Legal panel of lawyers, said. “Some people will attempt to set this up on their own and do it incorrectly, spending more money than necessary. This can be avoided by consulting a lawyer from the beginning.”
Research Home Energy Auditors.
When you buy a new home, it’s difficult to figure out how much utilities will run you every month. Energy audits can help homeowners save hundreds on energy bills. If you choose to hire someone to conduct an energy audit for your home, do the proper homework and check references. Scammers claiming to be energy auditors are targeting homeowners, charging thousands of dollars to make minor repairs such as switching out light bulbs for more energy efficient ones.
“These scammers are taking advantage of the elderly in particular, going door-to-door selling contracts for so-called energy audits on the spot,” Gonzales said. “If you have any questions about an auditor’s legitimacy or contract work offered, consult an attorney.”
Read the Fine Print on a Reverse Mortgage.
While reverse mortgages are not a scam, it’s important for homeowners to understand the fine print before they sign. Many individuals will sign up for a reverse mortgage without considering their estate plan. If someone with a reverse mortgage decides to give the house to an heir after death, the heir will become responsible for the mortgage. It’s important to seek legal consultation before signing a mortgage to make sure you have considered all options and possible unforeseen consequences.
Consider Getting a Lawyer.
The home-buying process is complex and there are numerous steps where it’s easy to make a mistake. Realators, mortgage lenders, banks – they may not all have your best interests at heart. To make sure you’re getting a good deal, consider getting your own lawyer to look over mortgages and contracts before you sign on the dotted line.
Does getting a lawyer sound like something only a rich person buying a mansion could afford? Think again. Every Texan can get a lawyer to help with real estate matters through Texas Legal, a nonprofit legal insurance company that provides access to professional legal help. Learn more about our plans available through employers or organizations or for independent members.