Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.2 9/18/84; site bubba.UUCP Path: utzoo!linus!decvax!decwrl!pyramid!ut-sally!utastro!cositex!bubba!gj From: gj@bubba.UUCP Newsgroups: net.invest,net.consumers Subject: Re: Re: "No Money Down" (Other People's Money) Scam Message-ID: <164@bubba.UUCP> Date: Tue, 7-Jan-86 23:08:17 EST Article-I.D.: bubba.164 Posted: Tue Jan 7 23:08:17 1986 Date-Received: Thu, 9-Jan-86 06:08:17 EST References: <587@cylixd.UUCP> <312@3comvax.UUCP> <1725@cbosgd.UUCP> <748@wang.UUCP> <2491@amdahl.UUCP> Organization: COSI Texas, Austin, Texas Lines: 65 Xref: linus net.invest:1008 net.consumers:3352 > In article <748@wang.UUCP>, rudy@wang.UUCP (Rudy Bazelmans x72609 ms 1989) writes: > > > Oh yes, he figures on financing the house at 90% of the appraised value > > > But he just bought the house for $150,000, and the house > > > is going to have to be appraised for the loan, and if it just sold for > > > $150,000, the appraisal isn't likely to be for $200,000. > > > > Not true, $150K was the discounted cash price. It could still be be appraised > > for $200K. > > Only if you can find an incompetent or dishonest appraiser. . . . . . > > The key to this scam seems to be finding an incompetent or dishonest > appraiser to lie to the bank about the value of the property. If you > can find one (who hasn't already ruined their reputation), it is very > easy to make lots of money. The problem is finding somebody willing > to flush their career down the drain (and possibly find themselves > sued) so you can get rich. I would like to offer a different opinion on the above comments. The scenario mentioned above could very well occur and in fact be completely ethical from an appraisers standpoint. One would not have to find a "dishonest or incompetent appraiser" to get an appraisal of $200,000 for the above mentioned property. The quote made below is from "Texas Real Estate" by Charles Jacobus and Bruce Harwood. "The Market value ... is the highest price in terms of money that a property will bring if (1) payment is made in cash or its equivalent, (2) the property is exposed on the open market for a reasonable length of time, (3) the buyer and seller are fully informed as to the market conditions and the uses to which the property may be put, (4) neither is under abnormal pressure to conclude a transaction, and (5) the seller is capable of conveying marketable title." An appraisers job is to determine the market value of a property. Just because the seller was talked into selling for below market value does not necessarily affect the market value. It very well could remain the same. The methods of appraisal take up about 30 pages in the book so I won't go into them. The point I am trying to make is that there is a huge difference between market value and sales price and folks getting involved in real estate should be aware of this. I feel that deals of this sort are extremely abusive and that there are hundreds of better ways to make a buck in real estate. However, they are legal and the seller in this instance would have no recourse unless s/he was misrepresented to in some manner. Disclaimer: I don't hold a real estate license, am not an attorney, nor an expert in real estate. These opinions are my own and in no way reflect the opinions or policies of my employer. -- George Jenkins, COSI Texas, Inc., 4412 Spicewood Springs #801, Austin TX 78759 USA uucp: {ihnp4,seismo,ctvax}!ut-sally!cositex!bubba!gj at&t: (512) 345-2780