Investment technique 'legal, not very moral'
Updated On: May 27 2014 07:13:38 PM EDT
An apparent real estate scheme has an Orange Park man fed up and unable to move.
Don Rammon is on a fixed income and recently divorced. He needed a smaller place to cut down on his bills. He thought his home was sold and he could finally move.
Rammon said the buyer was nice and wanted to help, so he signed some papers.
"He says, 'Yeah, we'll do a contract.' So he did this contract for me to agree to the sale," Rammon said.
The contract first had the house at $220,000. Then the buyer said he wanted it for $180,000; then $166,000. Rammon said when he refused to sell at that price, the buyer and an escrow company put a lien on his home so he can't sell it to anyone else for 10 years.
"I can't even (get it) listed. And I have a contract on another home and I'm supposed to take the money from that move over there," Rammon said. "He is holding my house hostage."
Experts said this same thing happens all over. Someone offers to buy your home, you sign the papers, and then find out if you don't sell it to them, you legally can't sell it to anyone else.
"I don't think it's illegal but I don't think it's very moral," said real estate attorney John Moss who looked over the case and is familiar with the tactics.
Moss said the prospective buyer likely took a real estate course that promises quick easy money. An investor buys the property, ties it up legally and then tries to sell it for more without putting any money in.
"They go out and find a buyer, they get him to sign up all the documents and record them as public records resulting in that property not being able to be sold to anyone else for a certain amount of time, in this case, 10 years," Moss said.
Moss said it's taking advantage of unsuspecting people.
The investor behind Rammon's home said this was no scam -- it's a legitimate investment. He did admit he learned the technique from a real estate investors class.
"I think if he does it here, he is going to do it in another place," Rammon said. "He probably took the weekend course (on) how to flip a house and turning around and he's got me really handcuffed since March."
The escrow company behind the tactics did not answer or return calls about this transaction. Rammon said he thinks a lawsuit is his only option.
Experts recommend only using a licensed Realtor or real estate attorney when buying or selling.
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