Property scams and shady real estate schemes are not a thing of the past. They’re very real and often take advantage of unsuspecting home buyers. It’s important to familiarize yourself with common scams affecting the real estate industry today to protect you and your investments and to avoid them at all costs.
Online Rental Scams
With an increase of online real estate marketplaces, renters and buyers often start the new home search process online. Scammers take advantage of this trend and lift actual listings by reposting it as their own. You’ll often find these hijacked listings on Craigslist as rentals and scammers will go as far as meeting renters in person to take a cash deposit or wire money of an application that is unavoidably “denied.”
To avoid falling victim to these scams, we suggest only using reputable online platforms in which listing are verified and to be cautious if you’re ever asked to wire any money or place a cash deposit before signing any legal documents.
Deed For A Fee
After closing, home buyers will receive an official-looking letter in the mail offering to send them a certified copy of their deed for a fee. New home buyers often don’t know what to expect, and because it looks official, buyers often get suckered in and taken advantage. After closing, buyers already receive the deed to their home for free from the title company.
Renting Foreclosed Homes
The folks over at DCrealestateguru.com say “We’ve also seen a similar issue where people will rent out their foreclosed homes before it forecloses.” Unfortunately, homeowners who find themselves in a desperate situation and are facing foreclosure may list their homes on the market for rent. The homeowners collect rent as the impending eviction date draws closer, and when it finally arrives, renters are forced to relocate.
To avoid this sticky situation, do your homework. There are online resources that will show you if a home has recently been foreclosed.
Email Scams & Phishing
Another common scam that occurs quite often is when buyers receive an email notification to wire closing funds to a certain bank, when in fact, the email has actually been hijacked.
Phishing attempts against real estate agents are incredibly prevalent, and it’s important to confirm with your title company and agent of the correct amount and location before wiring any funds.
Avoid Overconfidence & Perform Due Diligence
The smartest precautions and preventative measures you can ever take is to perform due diligence and do your homework. Avoid fooling yourself into believing that it couldn’t happen to you. Because it can.
A few takeaways to remember:
- Always avoid paying in cash or wiring money.
- Work with a credible real estate agent.
- Research the property and do your homework.
- Listen to your gut.
- Question everything.
And whenever you’re ready to enter the real estate market as a renter, buyer, or existing homeowner, be sure to keep these tips in mind and don’t let yourself be swindled or caught off-guard!
And now back to you
Have you ever found yourself in a shady situation?
Let us know in the comments.
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