Real Estate Scams

How to Avoid Real Estate Scams

Real estate is such a precious commodity. When there is a good deal, people can get desperate. Scammers play on this vulnerability and, as a result, there are plenty of real estate scams. Anyone can fall prey to a real estate scam but if you know what to look out for, you’re a lot more likely to stay safe. Here are some common scams and tips on how you can keep yourself protected.

Transferring Money to the Wrong Person

During a real estate transaction, you may be asked to email someone your banking information. While this is a convenient way to pass on information, it also comes with the chance that your money gets into the wrong person’s hands. To avoid this, make sure you are sending the money to your real estate agent or another person you can trust and don’t accept last minute changes to banking details.

Renting Property that Isn’t Real

Have you ever seen a great deal on a property that seems too good to be true? But when you try to check out the property you find that you can’t actually access it. There is probably some story attached like ‘the landlord is out of town’ or something clever like that. You might even be taken to check out the exterior of the property, but you can’t get inside. If this sounds a little fishy to you, it probably is. In scams like these, you will often end up paying a deposit only to find out the property was never available in the first place.

If you are dealing with an agent that seems less than honest, here’s how you can tell whether the property is imaginary or not.

·        Check the records to find out who the owner is and make sure that is the same person you are dealing with. The records will also tell you if the home is in foreclosure.

·        Talk to the current tenants or neighbors in the area to see if you can get any information on the home.

Title Fraud

Title fraud happens when a third party produces fraudulent home ownership documents in your name. Then they go to the bank and take out a new mortgage on the property. Once they have the cash from the transaction, they disappear leaving you with the payments. The only way to avoid this is to keep your personal records safe. Make sure no one has access to your information and be careful when you are making credit card transactions and large money transfers. Title insurance can also protect you from title fraud.

Sellers Withhold Information

This is a common scam that can occur in a legitimate sale. It involves sellers withholding information from you concerning the property’s condition. After you move in, you may be faced with expensive repairs on damage you didn’t know about. To keep this from happening, ask as many questions about the property as you think necessary. View homes with an experienced agent who will make you aware of any issues. If the home is being sold in ‘as is’ condition, certain things will need to be disclosed before the sale is made final. Being aware of scams and knowing how to avoid them can help protect you.