Question: I often see advertisements offering "all cash for your house or condo." Some of these ads offer to give monthly payments for equity. What type of guarantee is the seller offered so as to insure that he/she gets the full amount. Suppose the company goes bankrupt? How can these companies offer such benefits as "three times your equity"? Your response would be helpful.
Answer: The moral of this column can best be summed up with the old adage "caveat emptor -- let the buyer beware."
As with any transactions among strangers, most are legitimate, but many are fraught with problems, including fraud. You have sent me a newspaper clipping, whereby a promoter offers to buy any house -- often sight unseen -- and pay the seller on a monthly basis any equity that exists in the house.
At first blush, this may be a good deal. You -- as seller -- will be able to sell your house, and take payments on an installment basis.
Furthermore, by selling your house, you will be relieved of any obligations to pay your outstanding mortgage as well as the real estate taxes.
But this is theory; in practice, there can be many problems.
In the next few days we'll look at some of the possible pitfalls:
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