Investor Sharks – What are they? How to Spot ‘Em

Investor Sharks are everywhere and like roaches coming out in the dark, these sharks come out in droves whenever economic events or personal problems occur in which the sharks can take advantage.

Investor Sharks typically attack the vulnerable - homeowners having financial difficulties, families that have just lost a loved one (probate), they watch the legal notices for things like divorce, bankruptcy (did you know there are companies that sell such lists?).

Like a wolf in sheep's clothing, these sharks pretend to want to help the homeowner, depending on the wishes on the homeowner, these sharks make false promises of bail-out cash or re-financing or if the homeowner has decided to sell, these sharks will sometimes produce a contract for a higher price than they actually intent to pay.

In reality, the homeowner is duped by what is actually a very effective con-artist and valuable time is lost. The foreclosure process is not halted while the homeowner tries in vain to re-finance or waits for this investor-shark to buy the house.

All too often a call comes in from someone that got tangled up with a shark just to find out that the real intent of the shark was to get the property for pennies on the dollar - leaving the homeowner without any cash at all.

It is surprising to me how many people rely on what they are told rather than insist on everything in writing.

So, how do you spot these Sharks? Three quick preliminary questions:
1. Ask for it in writing. Whatever you are being promised, get it in writing. If the Shark or Foreclosure Specialist or Consultant (whatever the label); if they won't put it in writing, you should see a red flag.

2. Ask for 24 hours to think about it (the offer). Foreclosure is usually very emotional and stressful, be wary about impulse decisions. If the investor refuses to allow you "think" time, a red flag should go up.

3. Ask about credentials. Is this person licensed in any way - e.g. a Realtor, Mortgage Broker, attorney? Member of the Better Business Bureau? In a nutshell, anyone can put their name on a business card and call themselves a professional or a specialist or whatever. However, if you do business with a licensed individual or company - then, should you get scammed, there is recourse for you (whatever agency licensed that person will have a division for complaints).

Just be sure to ask questions, take notes, and allow yourself time to think - Proactive instead of Reactive. You'll get through this.