How To Avoid Real Estate Scams
Buying and selling a home is a vulnerable experience, as you must trust many people you don’t know. That’s why the real estate market is filled with many people who take advantage of unsuspecting victims. Understandably, countless people want to know how to avoid real estate scams.
The best way to avoid a real estate scam is to use a reputable realtor when you buy and sell a home. Never provide financial information online or over the phone when it comes to renting or buying a property. Reverse-image search pictures of properties you see on online listings to determine if you are looking at the real property listing.
Sadly, you can’t always get your money back if you’ve been scammed, especially if you sent a wire transfer. Follow along as we explore our comprehensive guide on how to avoid real estate scams.Â
8 Common Real Estate Scams To Avoid
1. Home Title Theft
Home title theft is a horrible crime that is frequently committed by either a fraudulent realtor or a scammer. This scam occurs when someone steals your signature and puts it on a deed. They typically target vacant homes where people are less likely to notice the scam at first.
This can potentially leave you stuck with bills, taxes, and debt that you never knew about. It’s a form of identity fraud, and it often happens when you’ve been the victim of a data breach. The best way to catch this scam is to be proactive about checking your credit if you suspect strange activity.Â
Your credit will likely take a negative hit if you’ve been the victim of home title theft. It’s also important to keep an eye out for suspicious bills linked to an address you have nothing to do with. Besides that, you must simply educate yourself about data breaches and strictly use reputable websites.Â
2. Fraudulent Listings
Have you come across a real estate listing that seems too good to be true? If so, then there’s a chance that it is fraudulent. Scammers sometimes co-opt legitimate listings and then present it as as their own.
For example, a scammer may find a home listed online, and then repost it with a lower price. Naturally, the low price may appeal to potential buyers looking to save money. The scammer then often asks for money up front and you may never hear from them again.
One way to avoid this scam is to reverse-image search the pictures of the house. You can tell it’s a scam if those images appear online for another listing through a legitimate realtor. Never provide financial information online or over the phone when it comes to real estate listings.
3. Investor Scam
Investor scams are tricky to navigate, as they often sound quite promising. This scam consists of a fake investor who typically says they see great potential in your property. They offer to put your property under contract with the hopes of buying your property or turning it into a business.
While this isn’t often as malicious as some other real estate scams, it’s a huge waste of time. The fraudulent investor is essentially making you waste time you could spend on real buyers. Your property may sit on the market for months or even years without them spending a dime.
You can avoid this scam if you carefully research the proposed investor before you put the property under contract. Legitimate investors have plenty of capital to invest, so they’re not going to waste your time without paying you.
4. Wire Fraud
Wire fraud isn’t exclusive to real estate, but it’s sadly quite common. This multi-faceted scam often includes someone impersonating your realtor. Scammers look up legitimate realtors and target their clients before they close on the house.
For example, they may see that you are on the market or getting ready to purchase a home. The scammer will pose as a realtor and request that you wire them money to cover some costs. Once you wire them this money, there isn’t much you can do to get it back.
Wire requests come with specific directions and rarely include swift time constraints, unlike fraudulent ones. Call your realtor right away if you receive a wire request and think that something seems off. Otherwise, you must immediately call your bank and tell them to stop the wire transfer if you already sent the money.
5. Buyer Identity Theft
It’s no secret that sellers receive countless inquiries from buyers when they sell their homes. Usually, these requests are fielded by real estate agents who handle the business. That’s not always the case, however, and some homeowners place their homes on the market without help.
In that case, you must answer many requests from potential buyers, and some of them may be scammers. Never respond to a message from a brand-new account inquiring about your home. New accounts that have no verifiable information are often scammers.
It’s easier for scammers to steal your identity and financial information once you respond to them. Look into their profile to see the age of the account, and then look them up online. Otherwise, it’s best to ignore the inquiry and simply use a realtor instead.
6. Mortgage Refinancing Scam
Many people refinance their mortgages each year through lenders. That said, it’s up to the loan recipient to request this process. Reputable lenders don’t reach out and offer homeowners to refinance their loans at extremely low or high interest rates.
Even still, many people fall victim to this crime and provide financial information to bogus lenders over the phone. This scam sadly affects senior citizens the most, and they lose equity in their homes.
7. Inspection Scams
Inspections are necessary any time that you buy or sell a home. Otherwise, the buyer won’t be able to secure a mortgage loan. Sadly, there are many bogus inspectors who either operate independently or with fraudulent buyers, sellers, and realtors.
Sometimes, sellers and realtors even bribe inspectors to ignore problems with a property. This helps the seller get the most money out of the property without fixing problems that would cheapen its value.
The best way to avoid this is to make sure that you only work with reputable, certified inspectors. Ask to see their certification, and call their employer or even the state if you suspect something is wrong. You can even ask your realtor if they are familiar with the inspector.
8. Bogus Rental Property
Renters don’t always have the luxury of visiting a property before they pull the trigger and sign a lease. That’s especially true if you’re moving to a new home from far away. Scammers take advantage of this and list bogus properties that aren’t theirs to rent out.
Never sign a lease without having been to the property in person if you can help it. Otherwise, it’s a great idea to strictly rent from landlords who manage many properties. Reputable rental companies manage many properties and are easy to reach.
Can You Get Your Money Back From A Real Estate Scam?
It’s hard to get your money back from a real estate scam unless you immediately freeze a wire transfer. Scammers often create accounts and delete them after they withdraw the money that you sent. You are more likely to get your money back if you report the incident as fraud right away.
Summing It Up
Home title theft, fraudulent home listings, and wire fraud are the most common real estate scams. Scammers often pose as buyers, sellers, and realtors, and then steal your financial information. Only work with trusted realtors who have great reputations, or else you risk falling victim to a scam.
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Nick Durante is a professional writer with a primary focus on home improvement. When he is not writing about home improvement or taking on projects around the house, he likes to read and create art. He is always looking towards the newest trends in home improvement.
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