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The scam is:
How to do Real Estate deals with no money and no risk

Tell the seller you want to buy 3-4 houses for rental properties.
Tell the seller you want to do a cash closing quickly but you want the Standard 45 day Inspection Period. Then ask them how fast they can close.
Tell the seller you want to get renters in the house as soon as possible to start getting income.
Tell the seller you want to show it to renters or possibly a buyer.

When you fill out the contract include those Items and be sure the contract is assignable.

With the contract at the Title Company you are free to market the property without a Realtor’s License.
List it for sale and when you find an investor, assign the contract and collect your profit.

Easy and Risk Free.

If you don’t sell the house before the 45 days is up, just start giving excuses as to why you don’t want to buy the house anymore.
This excuse can be anything from financial strain to noticing new things.
Most of the time you don’t need an excuse at all.
As far as the seller knows, you just changed your mind. You never go to closing.

Why would a seller allow me to do this?

The seller believes you are buying his house. He is just waiting on the closing date.
There should be no reason why the seller should suspect anything is wrong, and don’t give one.
After you cancel the contract, you will have no further contact with the seller.

3 Thoughts on Is it Fraud to enter a Contract with false pretences?
  1. Reply
    Kevin Williams
    October 28, 2011 at 3:04 am

    Most sellers who entertain this scam will see right through you in a second. It appears that you are hustling, and like most hustlers you think about nickels and dimes. If the property was priced to sell and you had the cash then you would be able to just purchase the property outright. Therefore your no money down scheme would fall apart because as a seasoned seller I would then ask you for proof of funds. Additionally, I verify with your bank the funds are in the account.

    As well, most most attorney’s would strike any language in the sales contract which allows assignment. This ploy would not allow you to purchase my, Brooklyn Bridge” for a dollar.

    Finally, any seller will require at least 5% down-payment or deposit with the contract and all language in reference to mortgage contingency will be removed since this is a cash deal. language will be inserted warning you “time is of the essence”. If you failed to close in the 45 days your deposit will not be returned.

    The above pretense will work for some people I am sure. After all, there are still people on craigslist renting a 4 bedroom apartment in Trump Towers from some African in Nigeria who speaks no english and has the last name Lee. But welcome to the real world. There are a lot of smart people like you in these situations http://www.nbcnewyork.com/news/local-beat/FBI-Massive-NY-Mortgage-Fraud-Round-Up-Underway-96556234.html and in the end you all go to jail. There’s always a smarty pants who feel they can beat the system.

    Hey, if you see Bernie Madoff at the Astoria where you will both be staying at the pace you are going please tell him Hello.

  2. Reply
    Iffy
    October 28, 2011 at 3:11 am

    You keep posting this and the answer is the same. Once your offer on the house is accepted you are legally required to buy the house. You have no excuse to back out. The seller will sue you in court. You lose your deposit, fees for Title search, appraisal, inspection Nor can you sell what you do not earn. That is Fraud

  3. Reply
    Two peas in a pod
    October 28, 2011 at 3:42 am

    Sounds good on paper, but every single time I make an offer for a client, the seller’s agent wants to see proof of funds to close and I also require it for my listings. You will also need to put up a deposit and NO one in their right mind will agree to a 45 day inspection period. Too many holes.

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