(320)260-3290 steve_baklaich@yahoo.com

Scammers know how to bait a trap. The fraud from scammers hurts people everyday. The cheese in a trap, the bait, is deliberately set up to be incredibly enticing. The “cheese” in the rent to own scam trap is a promise of being able to buy a home using part of your rent payment in the purchase.

The simple promise of saving money, affordable financing and easy terms draws in renters and future home buyers. Read on and learn avoid being the victim of a, now common, rent to own scam.


Baiting the Trap with a Deal

St Cloud has an excellent rental market with rentals being turned over as quickly as the painters can get the job done. Vacancy rates are extremely low marking it harder on some people to find a nice place at an affordable price. The idea of saving money and time is attractive for St Cloud renters. Heck we all want to save time and money, right?

Home ownership can help you build wealth because you are putting your monthly housing expense, your rent payment, into a purchase. You are now buying an asset.

Scammers know all this and understand that the offer of rent to buy is a very enticing piece of cheese to put in a trap.

Real Estate Fraud Alert

This real estate fraud is used by criminals to take money from honest hard working people. Please be aware this is not just happening in St Cloud or even just Minnesota. This kind of fraud can and does happen in real estate markets all across the nation.

Living anywhere for a period of time you see things and you learn take the good with the bad. Fraud is bad and fraud occurs everywhere. Realtors are hired to protect their clients and to watch out for their best interests. Sometimes this means alerting people of a Fraud, in this case it is the fraud of rent to own scams.

Real Estate Fraud the Rent to own Scam

The other day I was talking to a lender and he was describing a phone call he received from an alarmed consumer who was looking for help. A concerned and fearful customer who needed answers. The story was almost identical to one I had heard last year.

A Too Common Scenario with a Lease Purchase Scam

A woman enters into a lease/option/contract for deed* with man who owns a single family home. She pays a down-payment ($2,800 in the 1st case, $12,000 in the most recent case), and the man tells her he will complete the title transfer and gives her they keys.

She makes her payments on time for a few months thinking she is building good credit. One day there is a sheriffs Deputy at the door, telling her she needs to move out. The property has gone through redemption** and is now owned by the bank.

The man has taken her money, and left her without a home. She calls law enforcement. After she explains the story and tells them about her agreement, they explain that it sounds like a civil matter, and she should get an attorney.

The Rent to Own/ Lease Purchase

*There really is no such thing as a lease/option/contract for deed. There is such a thing as a lease/option, and there is a contract for deed (in some areas referred to as a contract for sale) which entails the Seller financing the sale and taking payments for a period of time.

**Redemption is the period after the Sheriffs Sale (foreclosure) during which the home owner may pay back the loan in full and avoid being evicted. In Minnesota the period is 6 months in most cases. The man who acted as the seller in these cases was selling the home to someone, knowing the bank was going to take the property shortly. This information was not shared with the women in these cases.

Avoid the Rent to own Scam

Please be careful. If you have a question or two, call a REALTOR, or the local legal hot-line. In each of these cases the victim did not get any paperwork and trusted the Con Man to transfer the title.

Please do your due diligence. The victim in the story entered into a transaction without any title work, or representation. They never even knew if the seller was the owner!

In real estate you need to have title work done, meaning either a lawyers opinion of title, or a title insurance policy. You want a professional to draft a recordable deed or contract for deed.

After the professional has drafted either a the deed or C4D they need to take it to the county of record and record said instrument. An attorney or a REALTOR could have helped in each case, and the call would have likely been free, because there was no deal to be had. Only a rent to own Scam to be avoided.

If you are relocating to central Minnesota check out all the wonderful reasons to love St Cloud. It is a  beautiful area full of things to do and lots of great houses. I would welcome the opportunity to help you find your perfect place here. Browse my website for more information about buying or selling a home, or property in the Central Minnesota real estate market.

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