[ad_1]
A Manitoba financial protection agency is warning homeowners about “underhanded” house flippers coercing financially vulnerable people into selling their homes for much less than they’re worth.
The Manitoba Securities Commission has gotten more than 10 calls in the past six months or so from homeowners with similar experiences of handwritten notes, left by strangers, offering to purchase their house, said Jason Roy, senior investigator with the commission.
In most cases, the homeowners were known or believed to be in financial distress, and Roy says the people leaving the notes are aware of that.
“What we’ve found out is that these are some individuals that are getting some information that the homeowner may be in some sort of financial hardship and essentially try to take that to their advantage to get their home for a cheaper price,” he said.
He wouldn’t reveal how the individuals may learn about people’s financial status.
The commission sent out a news release Tuesday warning the public about the flippers and their use of “aggressive and misleading tactics.”
Once the flippers identify a target, they will typically leave a handwritten note explaining they’d like to buy the home, or have someone else interested in doing so, the commission says.
Then they make a below-market-value offer, hoping to take advantage of the homeowner’s difficult financial situation, the release says, and discourage the homeowner from contacting a real estate agent.
The homeowners are sometimes asked to sign a contract allowing “so-called engineers or architects” to access the property before the sale is finalized, the release continues.
“In fact, these are not engineers, architects or tradespeople, but potential investors in the property, there to assess whether they can profit on the ‘flip,'” the news release says.
Letters like this one have been left at Winnipeg homes by house flippers offering well below market value, the commission says. Identifying information in this letter has been removed. (Submitted by the Manitoba Securities Commission.)
Roy said he believes the practice is being employed by a number of individuals, potentially educated by “seminars” on how to earn big on the housing market.
“I think it’s a whole group of individuals and sometimes there’s seminars that sort of blow through town and teach people how to get rich in the real estate market,” he said. “In many cases, they’re giving them bad or improper advice and causing all kinds of issues.”
In some cases, the practice is in violation of Manitoba’s Real Estate Brokers Act, which means the commission can take action against potential buyers, he added. The punishment can include a fine.
His advice is to work with professionals you initiated contact with yourself — not the ones brought to you by a potential flipper — to figure the real market value of your home.
“This type of thing can happen right across the city and people from all walks of life at some point may get into financial trouble — and these guys are somewhat taking advantage of it,” Roy said.
“It really doesn’t matter what neighbourhood you’re in, you should always follow that same advice. When you are looking to sell your home, use a professional, someone that’s registered.”
The commission’s real estate division suggests homeowners follow some basic advice:
- Check to see if the person who is transacting on your behalf is registered to do so online.
- Before selling your home, consider independent professional advice from a real estate agent, lawyer, etc. To find out the fair market value of your home, contact a real estate appraiser.
- Never sign blank documents that could later be filled with falsified information.
- Never sign documents without fully reading them and understanding what they mean. Seek independent legal advice if you’re unsure.
- If experiencing financial hardships, seek advice from financial professionals that you initiate contact with, such as credit counselors, bank or credit union professionals and so on.
People who have concerns about irregularities or unusual details in a real estate transaction are advised to contact Manitoba Securities Commission.
[ad_2]
