Thinking About Buying a Home?

This information is from the downloadable brochure "Thinking About Buying a Home?" prepared by Atlanta Legal Aid.

Find out how to identify and avoid scams when buying a home.


  1. Find a local HUD-approved, nonprofit housing counseling agency.  Meet with a housing counselor to evaluate your budget, credit history, legitimate financing options, and possible down payment assistance. Also, enroll in a free homebuyer’s workshop. You can find a housing counselor here:

  2. Work on your credit, budget, income, and savings before you begin house hunting.

  3. Get pre-approved from a reputable bank or mortgage lender.

  4. Hire an independent inspector to make sure the house is in good condition.

  5. Have your own lawyer examine the purchase agreement, other documents you receive, and the final closing papers before you sign.

  6. Get your own title insurance policy to make sure you get good, clear title when you buy your home.

What’s the problem?
If you are considering buying a home, watch out for traps that are designed to steal your hard-earned money and leave you and your family on the street!
Beware of lease-purchase options, contracts for deed, seller financing, and similar deals, because they almost never work.

Types of Home Purchase Scams

Lease-purchase options: You sign a lease that includes an option to purchase the home if you can get financing during the option period (often 1 year). You usually make a large down payment (which may or may not be credited toward the purchase price) and pay more in monthly rent (a portion of the rent may or may not also be credited toward the purchase price).

Typical result? Either you can’t afford the lease payments that have drastically increased based on fine print in the lease; or you aren’t able to qualify for financing; or the home doesn’t appraise high enough to qualify for the loan amount you need (even after applying the credit from the down payment and rent payments). When you cannot pay the lease payments, or you pay but can’t get a good loan to exercise the option to purchase, the seller will evict you and your family, keep the house, your down payment, and excess rent payments, and then turn around and prey on the next unsuspecting person. You lose the home AND your money!

Contracts for deed: The seller provides financing and you think you own your home with a mortgage. However, the contract says you won’t get title in your name until after you’ve paid the entire loan balance (often over a 30-year period). Typically, the contract requires you to make home repairs, pay the property taxes, and pay homeowner’s insurance during the 30-year period when you do not actually own the home.

Typical result? You spend money fixing up the home and pay the property taxes and insurance. If you miss a single payment, the contract says the seller can evict you like a tenant, take back the house with all the repairs and improvements you made, and keep all the money you’ve paid on the contract. Because of your work, the seller has a more valuable house to sell to the next unsuspecting person. You lose the home AND your money!

Seller financing (with or without a wraparound mortgage): The seller provides the mortgage, but the seller doesn’t comply with lending laws that apply to banks, credit unions, and other mortgage lenders. Seller financing often has inflated prices, high interest rates, and other bad terms. Sometimes the seller already has another mortgage on the property that also has to be paid to avoid foreclosure.

Typical result? Bad terms make the payments hard to afford, and almost impossible to refinance. Even if you are making your mortgage payments on time, if the seller stops paying the underlying or “wrapped” mortgage, you could be at risk of foreclosure and not even know it.  You lose the home AND your money!

Learn Your Legal Rights!
If you think you may have been trapped in a home purchase scam, please call or text the Atlanta Legal Aid Home Scams Hotline: (770) 648-4290, or call the Legal Aid office located in the county where you reside.

54 Ellis Street, NE
Atlanta, GA 30303
(404) 524-5811
246 Sycamore Street, Suite 120
Decatur, GA 30030
(404) 377-0701
30 South Park Square
Marietta, GA 30090
(770) 528-2565
South Fulton/Clayton
77 Cleveland Avenue, SW
Suite 410
Atlanta, GA 30315
(404) 669-0233
324 West Pike Street, Suite 200
Lawrenceville, GA 30046
(678) 376-4545
Senior Legal Hotline
(404) 657-9915 OR 1(888) 257-9519
Hearing Impaired
Georgia Relay Center
Dial 711 for relay services


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Last Review and Update: Sep 18, 2019
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