Real estate scams occur when fraudulent attacks target persons looking to sell or purchase a property. They’re committed by people who misrepresent themselves as legitimate parties by exploiting ignorant victims. A real estate scam’s impact can be emotionally and financially devastating. However, knowing how to spot a real estate fraudster can help you find ways to protect yourself. Here are four common real estate scams and how to avoid them.
1. Cash home-buying scams
Selling your house for cash is a quick and convenient option, particularly when looking to shift quickly or avoid the hassle traditional real estate sales bring. Nevertheless, cash home-buying fraud can leave you without a house and out of pocket. A cash home-buying scammer can convince you to sign your home’s control over to them, making you lose your rights as the property owner but remain responsible for mortgage payments. Be wary of unsolicited offers and potential buyers pressurizing you to accept a down payment or sign a contract quickly.
Unprofessional or vague communication, lack of a physical office, requests for sensitive or personal information, and unreliable/ inconsistent details are other signs of cash home-buying scams. Reliable cash home buyers should be transparent about their procedures and fees. Their communication should be clear and professional and should give you time to decide whether to close a sale with them. Click here to learn more about cash home buyers.
2. Wire fraud
Wire fraud is a common cybercrime in the United States. Over 13,000 people were victims of this fraud in 2020, experiencing losses worth more than $213 million. In a wire scam, a scammer pretends to be a real estate agent and persuades you to transfer your property’s closing costs into a fake account. Wire fraud hackers usually use fake phone numbers, websites, or emails that seem authentic to impersonate real estate agents.
To avoid wire fraud, understand the closing procedure by consulting a reliable real estate agent over the phone or in person about how the closing process will be completed. Write the contact details of everyone involved in the closing transaction, and beware of sudden closing changes. Avoid following up on emails containing wiring details. Instead, call your agent to confirm.
3. Rental scam
Rental scams are fraudulent property listings designed to rob interested renters. The fraudsters will try convincing you to pay a move-in fee or security deposit before signing the lease. A rental fraudster won’t want to meet you in person and will push you to shift immediately without seeing the house. They also don’t have a tenant screening procedure and might even want you to sign a defective lease.
To avoid falling prey to rental listing scams, thoroughly vet rental listings and meet the property manager/landlord to determine if you want to work with them. See the rental unit in person and read the lease before signing.
4. Title fraud
Title fraud happens when a scammer impersonates a homeowner’s identity and then uses the false identity to act as the property owner. The fraudster can then assume your home’s title, sell it, or get a mortgage. To safeguard yourself from title fraud, monitor your mail for a sign of address changes made without your knowledge and be careful with your personal data. Obtain a homeowner’s title insurance to safeguard yourself if claims or liens are filed against your home.
Endnote
Real estate fraud can be financially and emotionally destructive. Familiarize yourself with common real estate scams and how to avoid them.
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