I received a call today from a stressed out renter who just received a Notice of Trustee Sale taped to the front of her door. She has been renting the house since February.

Upon further research we found that this renter had entered into a month-to-month contract with a woman who was not even the owner of the property!

These particular renters basically have about 2 weeks until the sale date, and then an agent will come knocking hopefully to negotiate a decent Cash for Keys with her, because I highly doubt she will be getting her deposit back.

When looking for a house to rent, here are some red flags that you should be wary of:

1. Homes that are listed as "month-to-month"

2. Rental prices that are too good to be true. This 2,700 sq' house, for example was renting at $1,300 per month

3. Landlords who seem extraordinarily desperate


Here is the perfect example:

Three months ago I saw an ad a Craigslist for a big house in Tierra Shores renting at $1400 per month, that said "month to month ok". Suspicious, I pulled up the tax records and found it to be in default. I called the advertiser and asked her why she was renting a house that's in foreclosure. Her reply, "Well I'm renting it month-to-month", to which I replied, "yes, but are you disclosing this fact to the potential tenants and giving them an idea of how long before the bank takes it?" She says, "Well I don't know for SURE when the bank will take it." I said, "Yeah, but you DO know how many months you haven't been paying your payment." Her final stance was "it's month to month so it doesn't matter." And then she hung up on me.

So, with that loveliness, here are a few helpful hints:

1. Use a "leasing" agent. A good leasing agent will charge you $0 for their service. They will receive a commission or a negotiated finder's fee from the owner or management company. Make sure they do a tax research on the property you are interested in applying for.

2. Ask your friendly neighborhood Realtor or a Mortgage Broker, to look in their database to see if there are any foreclosure red flags on the tax records.

Your friend can also see if the owners have paid their taxes on time, and how upside down the owners may be on their loan. These are both indicators of the foreclosure "potential" of the house.

3. Do-it-yourself information on finding the owner of a property is here: http://www.riversidetaxinfo.com/riverside_faq_howdoifind.asp

We all know the screening Landlords do on potential Renters, however I'm thinking the day when Renters start screening potential Landlords is almost here.

Although there are no guarantees that the next house you rent won't go into foreclosure, do your research, so at least it's not next month!

Labels: Real-Estate, Scams