After experiencing natural disasters, the hardships are already unbearable, and the post-disaster reconstruction work is even more challenging, sometimes even impossible to achieve. During this period, scammers will try to take advantage, often appearing in the guise of real estate speculators.
These predatory buyers will attempt to purchase your land at a cost below market value, exploiting the plight of the victims to seek substantial profits. How can you determine if you are dealing with these speculators and how can you protect yourself and your property?
Predatory real estate buyers typically act swiftly after natural disasters. Their goal is to persuade or coerce property owners into accepting unfavorable contract terms. Additionally, they employ various tactics to alter agreed-upon purchase agreements.
There are various types of predatory real estate speculators, with the most common being low-ball buyers and transaction delayers.
Low-ball buyers capitalize on the homeowner’s distress for profit. In natural disasters in California, some homeowners may lack insurance coverage or have insufficient coverage to support rebuilding their homes.
In California, many homeowners own valuable land, but their homes have been damaged. These low-ball buyers swoop in, hoping that financial distress will force homeowners to accept low offers, enabling them to acquire land at a cost far below market value.
Despite offering lower bids, low-ball buyers typically honor promises of cash payment and make every effort to complete transactions promptly to quickly obtain property ownership.
These speculators may request extensions for property transfers and delay transactions for various reasons. Their objective is to keep property information off the market for as long as possible. Genuine potential buyers may turn to other properties, allowing these speculators to claim weakened demand and demand lower prices.
They shift blame to banks, claiming that due to decreased demand, banks have reduced the loan amounts they are willing to provide.
Inspired by a previous executive order issued by Hawaii Governor Josh Green, California Governor Gavin Newsom recently issued an executive order aimed at protecting wildfire victims from exploitation.
The order protects residents in heavily affected postal code areas of Los Angeles County. It makes any unsolicited and below fair market value purchase offers within these areas illegal. The order took effect on January 6, 2025, for a duration of three months.
The order also directs government and law enforcement officials to inform the public, ensuring people understand their rights under the order and relevant contact information. It also emphasizes the need to provide wildfire victims with more information on resources and related rights.
California law specifies that violating a governor’s order during an emergency constitutes a misdemeanor. Violations of the order can result in a fine of up to $1,000, a maximum of six months’ imprisonment, or both.
Even if you are eager to sell your property, take steps to protect yourself from predatory buyers. You can implement strategies to counter their tactics or simply disregard any unsolicited purchase offers.
The primary strategy to protect yourself from speculators is to consult and hire a reputable real estate agent. The agent should be familiar with your area and property type.
A good real estate agent will help you guard against these predators. They will represent your interests and strive to find the most suitable buyer for you. Therefore, it’s advisable not to sell property directly without an agent.
Whether you choose to work through a real estate agent or handle it yourself, if you decide to sell your property, you need to understand its value. Many fire-affected properties in California can often be sold at higher prices due to their location or potential.
To determine the value of your property, you can use the sales comparison approach: observe recent sales of similar vacant lands in your area. Some factors to consider include land size, zoning use, and potential development value. With this information, you can compare it to your property.
To ensure a more accurate assessment, it is recommended to consult professional real estate appraisers who can analyze market data and provide detailed valuation reports. With this information, you can evaluate ongoing offers and choose the proposal that best meets your financial needs.
Not listing your property in the public market limits competition from potential buyers, resulting in weaker offers. An example of a “private market” is multiple listing service platforms (MLS). Predatory buyers look for distressed properties in non-public markets like MLS and leverage the seller’s sense of urgency to secure low prices.
There are always opportunists looking to exploit victims of natural disasters. For those who have lost homes but still own valuable land, predatory speculators may try to purchase these plots at low prices.
Remain vigilant when dealing with unsolicited offers. Working with a reputable real estate agent is a safeguard.
Translation provided by 【大紀元2025年02月04日新聞】 (Epoch Times): ©2025 Epoch Times. All rights reserved. This article represents the author’s views and opinions and is for general information purposes only, without any intention of recommendation or solicitation. Epoch Times does not provide investment, tax, legal, financial planning, real estate planning, or other personal financial advice. Epoch Times does not guarantee the accuracy or timeliness of the article content.