With the rise of technology, it has become easy for scammers to prey on unsuspecting homeowners and people looking to buy or rent a home.
Websites like Craigslist and Zillow can be posted on by anyone with a computer, so not every post on these websites is going to be accurate or true.
In fact, studies show that Craigslist fails to flag more than half of the fraudulent real estate posts on their website.
The prevalence of fraudulent posts makes it more important than ever to recognize real estate scams.
In this blog, we’ll discuss the most common scams, and how you can avoid them.
Common Real Estate Scams to Avoid
Scams can happen while you’re looking to move into a new home, and also after you already own your home.
To help you find out more, here are three of the most common real estate scams to be aware of.
1. Online Rental Scams
Online scams flood websites like craigslist, causing financial harm to unsuspecting buyers.
The scammer will act as the landlord or homeowner and will respond to your emails promptly and professionally.
To avoid these scams, you need to be able to recognize red flags on fraudulent posts. The most common red flags you should look out for include:
- The seller is not local.
- Suspicious payment methods.
- Use of a third party.
- The scammer proposes to meet at a separate location to sign the tenancy agreement and exchange keys.
- The scammer has some excuse for not being able to show you the home.
The number one red flag, however, is if the deal just seems too good to be true. If the ad is asking for an extremely low price for the home that is well below other listings, it is definitely a scam.
2. Title Fraud
Scammers will actually steal someone’s identity by using false documents to get a home transferred to them.
The scammer will then take out a new mortgage on the home, taking the cash and leaving with no trace left behind. The homeowner is left to pay off the mortgage.
To protect yourself against this fraudulent act, you can purchase title insurance. This will keep you off the hook if a scammer pulls off title fraud.
You can also avoid title fraud by protecting your personal information more carefully. Scammers won’t be able to create fraudulent documents if they don’t have any of your personal data.
3. Fake Realtors
When you are looking to buy a home, it’s important to have a realtor to help you find what you’re looking for. However, you need to be careful because scammers are now posing as real estate agents.
The scammer will have you go visit a home and say they are unable to join you because of an emergency. When you leave the home you call the scammer and give them an asking price.
The scammer will tell you that the owners have agreed to that asking price, and that you just need to send over a deposit and first months rent. This money will go to the scammer and you’ll never hear from them again.
To avoid this, make sure you only work with realtors who are reputable and have online reviews vouching for their services.
For More Information
Real estate scams are everywhere and you need to be careful so you don’t end up losing a large sum of money while looking for a home. Luckily, there are easy ways to avoid getting scammed.
For more information on homeowner advice, check out our home tips blog for more information.