How to Avoid Moving Company Scams

Tip to avoid moving company scamsJust search for a good moving company online and you will get a number of results. They will offer a user-friendly website and amazing discounts which will impress you instantly. However, don’t hurry to hire a moving company that will offer the least price. Many such fraud companies offer less prices initially, but once the truck reaches the destination, they become adamant that you pay them almost double the cost. If you refuse to pay them, they will just take your possessions and drive away. At times, they flick some of your valuable items or abscond with the entire truckload of your belongings. However, you can definitely avoid being scammed in this way by the movers. Conduct research about the reputation of these companies and spot the red flags before trusting them with your goods. Here are a few tips that will definitely help you to be alert and avoid becoming a victim of moving company scams.

Check Their Reputation

You should ask help from friends, family, and colleagues in order to find a reputed moving company. You can also consult your real estate agent for getting hold of a good agency. One of the easiest ways to check the reputation of moving companies is to check their BBB grade. You can also have a look at the complaints registered against them and verify their status with the state and federal agencies. Most of the genuine movers will also be registered with the Federal Motor Carrier Safety Administration (FMCSA). Inquire if it is a member of the American Moving & Storage Association (AMSA). You can also verify if they have the proper licensing and insurance by visiting protectyourmove.gov. You can also log on to mymovingreviews.com to read what people have to say about them. Also, check the public opinion on their social media pages and other review websites.

Know the Right Time to Move

The peak season for business of movers is summer. This includes months from June to August. Also, as many renters prefer to move during the last days or initial days of the month, this period is very busy. Needless to say, Fridays―being the starting days of weekends―are preferred by people who move so that they can sort their things over the next two days. Hence, try to avoid moving during this time as movers will not be in a hurry or may not combine your boxes with those of others to rush through the work. Don’t hire companies for a last-minute move decision as they are bound to rip you off a lot of money.

Beware of Online Companies

There are many companies which offer online or over-the-phone estimates, and require you to fill out an inventory list. All this is offered at the lowest rates. However, beware that cheap rates do not necessarily qualify for quality service. Also, they add many ‘extras’ to boost the prices later on. Hence, hire a company that has a local office and will visit your house to give you an actual estimate.

Finding Scam Companies

The easiest way to eliminate the scam companies from your list is to call them first. If the operator answers by saying “Hello Movers” or “Hello Moving Company” without specifying a name, you can understand that it can be a bogus company. Also, check if the address mentioned on the company website is authentic. You can even get an idea about a company if the employees do not have uniforms or the truck does not have the branding of the company. This may indicate that the employees and the truck are on a hired basis.

Hire a Professional Company

Shortlist at least 3 to 5 good companies, and have their representatives give an estimate after visiting your house. You will be able to detect the fraud companies immediately after studying the vast disparity in the competitive estimates. Not only this, but also visit their offices personally to understand the level of professionalism in their work. Also, check if the company has stringent rules about paperwork and other formalities. Check how cooperative the manager is. A genuine company will provide you a copy of all the necessary state or federal booklets related to moving.

Verify the Costs

Usually, if you are located within 50 miles distance from the moving company, their representative will come to your house, and do the valuation of goods personally. There are a few companies who will charge you a minimum amount for a few hours of work. In most cases, if you are moving within 100 miles, the charges will be calculated on an hourly basis. However, for long distances, it will be based on the total weight and the mileage covered. Many companies also calculate the amount based on the cubic feet covered. Do not allow them to charge you on the basis of cubic feet, as you will definitely end up paying more. It is advisable that you decide upon a maximum price which should not be exceeded, in order to avoid being duped by the company into paying a large amount as ‘additional costs.’

Take Precautions

Do not just allow the movers to fill in their truck and leave with your things. Take photographs and videos of the truck and all the boxes in it. Label all the boxes, make a list of which box contains what, and keep it with you. If possible, try to follow the moving truck in your car. Be personally present on the premises while loading and offloading the boxes. Count and verify whether all the boxes have arrived safely without any damage or theft.

Understand about Extra Payment

Many fraud companies offer a low estimate initially and then rake up the prices after the truck has reached the destination. They do not allow you to have your possessions until you pay an extra price. To avoid this, understand when you are entitled to pay more. If they are cramming your boxes in the elevator or carrying them upstairs, they may ask you to shell out extra money. Also, if the truck does not get closer than 75 feet in front of your door, they will ask you to pay ‘long carry’ fees. You may also have to pay more for packing and unpacking of your goods and providing storage. Ask questions beforehand about which services are free and which are not.

Insurance Coverage

One of the indicators of a fraud company is that they will tell you that all your goods have been covered by insurance. Find a genuine company who will explain to you about the coverage and offer you additional insurance for the complete protection of your goods. It is advisable that you pay a little extra and get the additional “replacement value” or “cash value” coverage. This will come in handy in case your goods are damaged or stolen. If only the goods are damaged, it will mean that you had not packed them carefully. Hence, ensure that the box carrying them is also damaged before filing a claim. Also, check if these damages are covered under the renters’ or homeowners’ insurance. Know about the policies and procedures of the moving company in order to file a claim.

What to Pack

It is important that you pack all your glassware properly, and put a ‘fragile’ sticker on the box. Ensure that the box does not go below a stack of heavy boxes and damage your goods. Also, do not pack precious jewelry, checks, passports, cash, credit cards, etc., and send them with the moving truck. Don’t be surprised if you find that the box carrying valuables goes missing from the truck.

Movers’ Contract

You must always demand to retain a copy of the contract with you. Also, a genuine moving company will give you a Bill of Lading and a copy of your ‘Rights and Responsibilities.’ There are two types of agreements involved in moving which are binding and non-binding. The first one includes a written record of the advance taken and also has a fixed cost, while the latter is an estimate from the mover’s end, and can change based on the actual weight, distance traveled, and services offered. Make sure you choose the right option according to your requirement. It has to be signed by both the parties and should also bear the correct dates. Also, do not sign on a blank form, partial contract, or one that does not mention all the clauses.

Verifying the Payment

There are many companies who will demand that you pay the entire amount as deposit even before loading the truck. Do not fall for this as they can just take your hard-earned money and run away with it. This happens a lot in the case of fly-by-night movers. They will just close the shop and run away with your belongings. They may even dump them at a private storage, and you will have to shell out lot of money to retrieve them back. Try to avoid a company which will demand a deposit. It is also advisable that you make the payment by check or credit card and not by cash. This will act as evidence in case you have to file a case against the movers.

Know the Rules and Regulations

The Federal Motor Carrier Safety Administration (FMCSA) which belongs to the U.S. Department of Transportation (DOT) protects consumers who intend to move their goods interstate. It is mandatory that all the movers hand over a booklet called “Your Rights and Responsibilities When You Move” when they are handling an interstate move. You can file a complaint with the Department of Transportation and the BBB against the movers, if they have scammed you. In case you wish to press legal charges against the moving company, collect all the evidence and hire an attorney.

Remember, do not fall into the trap set by bogus online moving companies which promise to offer more services for less cost. Some companies may even cramp up your boxes behind those of other customers and reach your destination late with damaged goods. Also, there are companies which will cause unnecessary delay and ask you to pay more for it. Now that you know how to avoid being scammed by movers, conduct a background research on the companies, and hire only an authentic one.

Buying a House with No Money Down

People, who are interested in buying a house with no money down, may benefit from the following options. It is important to understand the dimensions of the methods undermentioned, before you sign on the dotted line.
Buying a house with no money down was easy before the crash of the housing market. There were a number of sellers, who were more than willing to help an aspiring homeowner purchase a home with virtually no down payment. Then, there were piggyback loans that were provided by the primary mortgage lender, or in some cases, the owner of the property, and if none of these avenues were open, the buyer could always consider purchasing Private Mortgage Insurance. Lease to own is a modified form of seller financing that was also available to people with limited finances. The aforementioned options had their pros and cons.

Piggyback loans were the most popular means of financing amongst cash-strapped people, who were desirous of owning a home without making the requisite down payment. Private Mortgage Insurance (PMI) was next in order of popularity. Seller financing — in case of piggyback loans — also became popular as home prices continued to escalate.

Today, piggyback loans are much harder to come by, although some lenders are still willing to consider Private Mortgage Insurance (PMI). In addition to these options, eligible borrowers can avail zero down VA-insured loans and 100% USDA financing. Buyers, financing through state Housing Finance Agencies and certain non-profits, can use the $8000 tax credit for making the down payment on the secondary financing provided by the aforementioned entities for availing a FHA-insured home loan.

Feasible Methods

► Private Mortgage Insurance
No-money-down homes have been made possible by allowing the borrower to procure a mortgage loan that requires private mortgage insurance as an alternative to the requisite down payment. Typically, the expected down payment is 20-25% of the purchase price of the home. PMI makes it possible for a person to obtain a mortgage loan, without paying a dime by purchasing insurance that protects the mortgage lender in the event of the former defaulting on the loan. Of course, the borrower/aspiring homeowner is required to pay insurance premium on a regular basis.

Although the premium is tax deductible, people often preferred piggyback loans to Private Mortgage Insurance, since the amount of insurance premium was generally more than the interest on piggyback loans. However, today PMI is the best bet for a person, who is keen on buying a house with no money down.

► USDA 100% Financing Program
United States Department of Agriculture (USDA) has a loan guarantee program that is better known as Section 502. The Housing and Urban Development Program (HUD) aids in financing buyers who are purchasing a house or a property for the first time. This program specifically is designed for low-income families so that they may own a property without suffering the grind of down payments. It is meant to provide 100% financing to first-time homeowners and people living in structurally unsound homes to help them purchase a home in the targeted rural areas. The best part about these loans, for people who qualify, is that the borrowers do not have to purchase private mortgage insurance even though the loan is a zero-down mortgage. Moreover, the sellers are allowed to finance up to 6 percent of the purchase price of the property in lieu of closing costs. The rate of interest on the zero down mortgage loan is adjustable.

► VA-insured Loans
The U.S. Department of Veterans Affairs (VA) provides eligible veterans, the facility of buying a home with no money down. These loans are known as VA-insured loans and are meant for all veterans as well as active military personnel in the Army, the Navy, the Marine Corps, the Air Force, the Coast Guard, and the National Guard. The best part about these loans is that the mortgage is a 30-year fixed-rate-level payment obligation. Applicants with less-than-perfect credit are eligible to avail zero-down mortgages that can be used to purchase single-family homes, approved condominiums, and townhouses.

► FHA-insured Loans
Although Federal Housing Administration (FHA) insured loans require 3.5 percent down payment, the first-time home buyers tax credit of $8000 and the subsequent legislation, allowing borrowers to monetize the tax credit and apply it toward their home purchase, has resulted in borrowers being able to buy a home without making the necessary down payment. This is because people financing via state housing finance agencies and non-profits can be assisted by the latter with the amount of down payment on an FHA loan, thus providing ample scope for zero-down mortgage loans.

► House Trading
This is one lucrative way of buying a house with no money down. Active investors swear by the policy of trading properties. When one trades one property for another, the investor is also spared of legalities concerning capital gains — a factor that companions the scenario when a property is sold. This, precisely, is one spot-on pro that selling a property offers. Either it is one large property traded for a syndicate of small properties or skipping their city to buy a house in an all-together new town tagging it their holiday home.

► Leasing with an Option to Buy
Renting a property may be accompanied with an agreement stating the option to buy the said property, as well. Under the terms and conditions of registration mentioned, the lessee and the lessor draw up a negotiable amount that ought to be deposited at stipulated time period in lieu of the property being used. Besides, this agreement also inserts a clause that states the disposition of the lessee to purchase the property formerly leased, at a price set during the lease period.

► Federal Programs
Ad hoc programs are arranged in order to facilitate low-income families to own a house. The Rural Economic and Community Development Administration offers loans with humble interest rates. These programs are deemed pro bono efforts to encourage the underprivileged families to acquire a property of their own.

► Piggyback Loans
Prior to the sub-prime crisis, piggyback loans were the most popular means of financing for a person, who was desirous of owning a home without parting with the requisite amount of down payment. Although, the popularity of these loans has declined on account of these loans shouldering much of the blame for the sub-prime crisis, some mortgage lenders, still may be willing to provide no-money-down mortgages.

As per the guidelines issued by Freddie Mac and Fannie Mae, people, who intend to buy a home by availing a home loan are required to down pay 25% of the purchase price of the home. The remaining amount can be borrowed from a primary mortgage lender. However, the borrower can circumvent the 25% down payment by obtaining a second mortgage simultaneously. In other words, the primary mortgage lender provides a loan for 80% of the purchase price, and the second mortgage lender, the remaining 20%. Here, both mortgages are secured with the same underlying house as collateral. The second mortgage piggybacks on the primary mortgage and carries a much higher rate of interest than the primary mortgage.

Traditionally, piggyback loans were 80-10-10, 80-15-5, or 75-15-10 loans. The first figure from the left indicates the percentage of the purchase price funded by the primary mortgage lender, the second figure is the percentage funded by the second mortgage lender, and the final figure is the borrower’s skin in the game. In time, the final figure was reduced to zero and resulted in no-money-down home loans. Thus, the borrower could easily buy a house with no money down. The second mortgage that piggybacked on the primary mortgage was typically provided by the primary mortgage lender, who gained in terms of higher interest rates than those charged on the primary mortgage. In some cases, the second mortgage was provided by the seller/owner of the house. This brings us to the concept of seller financing.

► Seller Financing
Seller financing often accompanied piggybacked loans, since the second mortgage was either provided by the seller, or by the primary mortgage lender. Seller financing involves transferring the title of the house to the buyer in exchange for a note, and the right to foreclose the property in the event of default. The note is pretty much like a mortgage that is paid off as a balloon payment within a period of 5 to 10 years. Since it is a mortgage, the buyer is expected to pay the seller a hefty interest on the loan. The seller, in turn benefits in the form of a high rate of interest on the loan, in addition to a security interest in the house.

Although 100% seller financing is a thing of the past, it may be possible for an aspiring homeowner to down pay less than 20% and still buy a home, if the seller is desperate to get rid of the house.

In the present scenario, lease contract with option to buy is the best option for people, who are interested in buying a home with minimum down payment. By paying as little as 1 to 5% of the price of the property, the aspiring homeowner can acquire the right to buy the house at an agreed-upon price at some point of time in the future. The aspiring homeowner (lessee) can then rent the house for a period of 3 years or so and pay the amount of the rent to the landlord or the lessor. At the end of this period, the lessee can buy the home from the lessor at the predetermined price or may abstain from exercising the option. Considering the present situation, most sellers are persuading aspiring homeowners to enter into a lease contract with option to buy.

Investing in Commercial Property

Buying commercial property as an investment can be a daunting task for the beginner, with several pitfalls. To enable a smart investment choice, some useful tips have been shared in this article.

In the aftermath of the real estate property market meltdown, people were naturally averse to taking risks, by investing in residential and commercial property. As a seasoned investor would advise you, in such bearish times, there are a lot of opportunities to take advantage of. With the real estate prices hitting rock bottom in recent times, many properties can be bought, at a fraction of the price they would have earned during boom time. While there is substantial amount of risk involved in buying commercial property, with proper research and wise choice, there’s profit to be made. At the outset, let me expound some of the advantages of investing in properties of the commercial kind.

Advantages of Investing in Commercial Property

Commercial properties primarily include office spaces, shops, storage warehouses, industrial spaces or any other piece of real estate that is leased out or used for commercial purposes. Location and space are two of the prime requirements of businesses and leasing a property is a much more affordable option for them, instead of buying it. This presents commercial property investors with an opportunity to make substantial profits.

One of the prime advantages of investing in commercial properties are the long leases and high rent that owners can earn. Compared to residential properties, commercial ones tend to maintained a lot more professionally, which automatically reduces expenses. The high percentage of return on investment, in excess of 8% to 9%, justifies commercial real estate investment.

Properties in prime locations can expect an annual hike of 3% to 4% in rent, which guarantees higher returns in the future. By handing over the maintenance and administration to a commercial property management firm, you can simplify your life and reap profits in the long term. Commercial property that are located in prime business zones are always in demand and hence you can expect a decent resale value in the future, when the prices in that locality appreciate substantially.

Commercial Property Investment Tips

You need to appreciate the prime importance of ‘Location’, when it comes to investing in commercial real estate. Businesses are looking for office, shop spaces, warehouses with all the necessary amenities and resources in their vicinity. So choosing a commercial space in the right location is the first important thing and it requires a substantial amount of market research to find such properties. You will have to network with real estate agents, who have a database of such properties on sale.

Decide on how much you are willing to invest, which will automatically limit your choices and help you focus on what kind of properties you can afford to invest in. Once you have shortlisted a few properties, determine the asking price and the projected returns through lease, after accounting the maintenance and taxation costs. If you are thinking of buying commercial property and plan to arrange for the investment corpus through a mortgage loan, do the math and determine the profits you will gain in the future after maintenance costs and loan installments. If the math shows you that the investment is a feasible one and you are guaranteed that your principal is safe with decent returns, go for it!

If you have a commercial space in a prime location, there is always going to be demand from businesses and the chances of your investment being highly profitable are higher. Work out the yearly maintenance costs for the property, research every aspect of the investment thoroughly before going ahead. Here’s me wishing you all the very best for your commercial property investment endeavors!