From the AEGIS e-Journal, Volume 2 Number 11, November 1999
Tens of thousands of frustrated property owners across the United States and Canada are getting sucked into an explosion of real estate “liquidation” firms. The liquidation firms, in exchange for an advance fee in the area of $250 to $1,000, promise to find buyers for un-salable property. With a barrage of sophisticated direct mail and telemarketing solicitations, these firms are telling weary property owners that the up-front charge is a marketing fee needed to cover the cost of promoting the properties on television, radio, a nationwide computer database, mass mailings, ad nauseum. Property owners are assured that their property will be marketed until sold! The fact is, that in most cases, once the fee is collected, the firm is never heard from again. That is called the “No-Pester” guarantee. Once you send them your money, we’ll guarantee they won’t pester you. It leaves the person still holding the property and the loss of hundreds of dollars. These land liquidation promotions have generated complaints in almost all US states and Canadian provinces. Further, a lot of these land liquidation schemes use assurances such as stating they are registered and bonded by state agencies, giving the false impression that they can also provide real estate brokerage services, even though they are not licensed to do so. These liquidation scams are cruel because they exploit the desperation of property owners who want to sell a piece of land or a property, but have not been able to do so. The land liquidation firms use familiar abuse tactics to get the people to part with their money. Owners of raw land, timeshares, and trailer park lots are particularly susceptible. These firms are under investigation all across the United States. In Texas, where a woman sent in a $388 check to a liquidation firm, she was told she would momentarily be receiving a contract in the mail. Of course the contract never arrived. In Oregon, a man sent $495 via Federal Express to the liquidation firm so he could sell his timeshare. When a contract was sent to this man, he refused to sign it because the terms differed substantially ÆGIS, November 1999 8 from what was discussed on the phone solicitation. But the company refused to refund the sales fee. A recorded conversation between real estate liquidation sales persons in Idaho got one couple on the hook for a fee of $695 by stating: “At a price of $16,000, I am showing that if you keep it at that, I have got between 18 and 20 buyers registered in the computer that we can show it to today.” In Arizona, Cease and Desist orders have been issued against seven out-of-state and six in-state real estate liquidation firms. In Alabama, one man sent in $250 in response to someone offering to sell his property for seven times its actual market value. Let’s face it, this is a typical scheme: Empty promises, sophisticated outreach to potential victims, and demand for advance fee, followed by unresponsiveness. But in these particular cases, the author does not feel particularly charitable toward most of the victims. As in any fraud, you need a perpetrator and a victim. Both of them must be willing participants. In this, as in almost every other case, the perpetrator has hit the greed (and admittedly in somc cases the desperation, for which we do feel sympathy) factor on the victim. The victims think they are going to put something over on someone else and unload a worthless piece of real estate. Some of the companies involved that have received cease and desist orders are: ADNET Inc., DBA the Advertising Network (Texas); American Land Liquidators, Inc. (Texas); Resort Properties Marketing, AKA Resort Nationwide Land Liquidators, AKA Nationwide Liquidation Services Inc., (Texas); Prime Property Locators, Inc.(Missouri); Properties Marketing (Texas); TRY-VIEW Inc.(Texas); Universal Land Liquidators Inc., AKA Universal Liquidators, Inc., (Texas).