This segment describes ways that unscrupulous house flippers and investors can take advantage of seniors. They’re looking to get deals, to purchase a property for less than market value. But if you’re 80 years old, hard of hearing, with family living out of town, and a flipper visits you using some of these strategies, it’s disgraceful.
Rebecca Bomann, CEO and founder of SASH Services, joins Suzanne to describe various ways house flippers try to take advantage of seniors, as well as hot to offset this and protect yourself from these tactics.
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*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
Welcome to the answers for elders radio show. meet the trusted experts who will give you straight answers and we’ll help guide you on the path of later life care. Now here’s your host, founder, caregiver and CEO, Susanne Newman, and welcome back everyone, to answers for alders radio network. And we are here with Rebecca Bowman, founder and CEO of Sash Services, and I know we’re going to talk. We talked the first about, you know, neighbors that want to buy a house and why. Sometimes there’s some danger, danger red flags in that. So now we’re going to move on to another category. And what are we going to talk about? This SEGMENTCAS and so we’re, you know, talking about how seniors can be taken advantage of in the sale of their home. Um, this is a really big one and so I’m glad we’re going to have a whole segment to devote to it. This is house flippers and in investors Um and just as a quick background to house flippers and investors, it’s important to know that folks who are House flippers and investors don’t go to community college and get a degree for this. There’s not a trade school or certificate. They get their education from going to conferences, Um signing up for coaching, going to boot camps that are held in a hotel like a conference, and it’s at these places that they teach these potential house flippers and investors how to get deals, which mostly include very aggressive tactics of getting a homeowner to agree to sell their property for less than market value. And so their strategies maybe are effective, but if you’re eighty two years old and living alone and heart of hearing and your family lives out of state and a house slipper comes to you with some of these strategies, Suzanne, it’s just downright disgraceful one some of the things they teach. And so I want to go through some of the ways that seniors are taking advantage of by house flippers and investors, and then we’ll talk as well about ways that people can offset this and protect themselves against this, especially with their senior loved ones. One strategy is they make the senior believe their home is worth much less than it is. Much less. They don’t show them comparable sales, they don’t help them see what they could get on the regular market. They just offer a low price and will sometimes scare them with conversations that their home is going to be cited by the city, it’s out of code, it’s going to be torn down. They should be lucky anyone’s interested in it at all, you know, especially if there’s deferred maintenance, which sometimes happen. Another strategy is they come in with an offer and they use their own contracts. They don’t use MLS issued purchase and sale forms that are standard in our industry. They bring in contracts they got from this boot camp and these contracts reduced the rights to the seller and increase the rights to the buyer and and they get the senior in a situation where they can’t get out of the contract and I bet the senior doesn’t even know they’re not signing. They don’t even know and they’re not even going to go through the forms with them. It’s just signed here. I’ve also heard of house slippers and investors knocking on seniors doors and just going straight to their home. In particular, they will read the obituaries and see when the senior has lost a spouse and then go to the senior’s home and begin talking to them directly and knocking on their door, knowing they’re in a vulnerable state and may decide to make the decision to sell their home. They may also, I’ve seen this happen, start with a high price that get the senior homeowner real excited. I’m gonna give you four fifty thousand for your home or seven hundred thousand for your home, and then, once they get the contract signed, they begin to come in with all these different reasons why the price has to go down, not ever telling the senior that they now have the right not to go forward anymore. And so they make the senior feel trapped in this contract. I’m sorry, I had to come down a hundred and seventy thousand because of X, Y or Z, but you are still selling to me, and they don’t let them know how they could possibly get out or change their mind. Um, and these are hard to hear, but this is really important for listeners to know that this happens. Another way that they do it is they’ll sign a contract with the senior homeowner and then they sell the contract to another party, another investor. This is called wholesaling or assignment. So they’ll put the house under contract, act with the senior homeowner, say for three hundred thousand. Then they sell the contract to another investor for a profit of fifteen or twenty. That investor, the third party, comes in and buys it and the First House flipper just goes away with their fifteen or twenty thousand and the senior has no idea that any of this is going on behind the scenes. Um and UH. It makes the senior more vulnerable because that one investor puts the senior’s house out on the market. Hey, I’ve got a deal under contract here it is while the senior still living in that home. Investors are coming and walking on the property and taking a look at it because they want to be the ones to buy the home. Another thing that they’ll do is push for a fast closing, all cash. Seven days all cash. Let’s do it right now. We’re going to close by next Friday, so that the senior homeowner doesn’t have enough time to get out. That’s it’s done. It’s final, it’s over with very quickly and there’s not a long process that allows the senior to really think through the decision they’re making and how important it is. Um, not all house flippers and investors are bad. There’s of course, people with integrity and without integrity, as you have said, in every industry. But what people need to know about house slippers and investors is they have no governing body. So a real estate agent is licensed by the State of Washington or the state of wherever you are, and we have our local MLS association that also holds US accountable to rules and regulations. There is no such thing for house slippers and investors. They can crawl out from under a rock to a really unscrupulous thing and then disappear again. There’s no accountability. Um, so they can come and go, start new companies, disappear and and not have that accountability, which is why they get away with doing things like this. Unbelievable. I have sat in many living rooms with seniors and their families where they will bring out to me a stack of letters that the senior has received from house flippers and investors that say I’ll buy your home all cash. You know, close in fourteen days as is, and they’re actually they look handwritten because the software allows the letter to look handwritten. This goes back to our discussion about feeling. It feels trustworthy right, but it’s just a computer generated letter and they’ll include a gift card or a dollar or a starbucks card or a heavy coin. That makes them feel obligated to call them back, you know, and feel like now they’ve got to do business with them. And so the question is is, why is the price that a house flipper offers a senior homeowner so harmful compared to that market listing if they were just going to list it? The reason is because house slippers and investors have to bake in a lot of extra line items into their budget. They have to bake in profit, you know, and a in a hedge. If things go sideways in the sale, they’re usually borrowing money at high interest rates because they’re borrowing from private or they’re using hard money exactly. So all of these actors pushed the price down to the senior that they would have been able to get if they had not sold to a house flippers. So, as an example, I recently listed a home for a client here in Seattle who his family had owned the property for eighty one years. Eighty one years. He was one year old when they moved in. He had kept it for eighty years. It was definitely a fixer. Old Electrical Panel, the blackberry bushes had grown over the back of the house. It was full of his belongings and he thought he might get only three fifty to three seventy five for the home and was thinking maybe a house flipper is all we can sell it to, maybe just an investor. Well, we helped him clean his clean his house out, we helped him sell at the belongings in the home. He made a few thousand from that. We did a deep clean, we landscape the outside, we put it on the market and instead of him getting three fifty or three seventy five for his home, which he was kind of expecting, we sold his home for four hundred and thousand five hundred dollars. That’s amazing. Is that going to make a difference in his long term? Huge difference right. Another hundred and twenty thousand, just by him not being vulnerable to thinking that a house flipper is the only way to go. So to offset this risk, you want to encourage your senior loved one, if they ever are approached by a house flipper or an investor, be there, be engaged, be present, show up at those meetings, look them up, call them. Don’t let those conversations happen without you don’t let those visits happen without you warn your senior loved one that if somebody comes and approaches them and says, can I just do a quick walk through, a quick inspection? No, absolutely not. These are not people to open the door to and never sign anything. Don’t sign anything, no matter how good it sounds, Um, until you’ve got those advisors and people around who can be looking, looking at it and making sure that all the teaser across, it’s Legit, it’s above board and the senior’s best interests are being protected. And obviously, by doing that you’re gonna know what kind of contract you’re actually signing too, because again, like you were saying, you don’t know what these contracts are Um that you’re signing. So that’s really important, obviously. And and go ahead, go ahead. Well, I know that a lot of times people will just watch the shows, you know, and I’ve seen them on H G T v. This is all you’re gonna get for your house. And that’s the first thing that came up into my head, like we’re all watching that, and who’s watching most of that? Are Seniors. That’s their big market, right and so obviously you know women and seniors are and I think in many cases are the most vulnerable as well. So that’s something that you know. You you definitely Um you know your words are absolutely important, and anybody who owns property is vulnerable to house flippers and investors, and so this is for everybody to hear and understand. There could be a good transaction with selling the home to an investor, maybe everything’s above board, but seniors do not know how to advocate for themselves as well and with contracts and forms and all the things that are happening, and so it’s really important that they don’t get swept away with some of these aggressive strategies and find themselves in a transaction that’s actually not in their best interests. Well, that’s important. So, Rebecca, how do we reach you? You can find us on our website at sash services dot com, and we have a toll free number of triple eight. Four hundred S A S H at seven to seven four, and Rebecca and I will be back with number three right after this. We it answers for elders. Thank you for listening. Did you know that you can discover hundreds of podcasts in our library on senior care? So visit our website and discover our decision guides that will help you also navigate decision making. Find US IT ANSWERS FOR ELDERS DOT com.
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Originally published September 04, 2022