Real Estate Scams

When it comes to buying and selling property, there are a lot of things that can go wrong. Fortunately, there are ways that real estate professionals can help their clients avoid becoming victims of fraud.

One common type of real estate scam involves a bait-and-switch. These scammers lure in their potential buyers with a high-end product, then push something else on them at the last minute.

Phishing

Phishing is a form of online fraud where a perpetrator poses as a legitimate entity such as a financial institution, tech support service or government agency. The aim is to capture a victim’s username and password or personal information such as credit card data.

Often, the emails are designed to look like they’ve come from an official source, complete with company logos, email address and contact details. However, they’re usually spoofed or faked.

A common example of this type of phishing scam is one that targets real estate agents. The crooks share attractive listing photos and information about renovations, updates or other important details that they hope will catch the eye of a potential home buyer.

The real estate agent is then expected to pay a fee or deposit to the crooks before they can see the property. This can be a huge amount of money and is a scam that is increasingly becoming more popular.

FSBO Scams

Real estate scams occur when criminals attempt to take advantage of the urgency that comes with buying, selling, or renting property. Whether it’s a home buyer looking to cash out on their property or a distressed homeowner in need of foreclosure relief, these scams are often targeted by con artists who know that getting people to part with their money can be extremely lucrative.

One of the most popular scams is a “loan flipping” scheme that targets home buyers who are in need of financing for a purchase. These fraudulent lenders charge high fees and interest rates that force homeowners into a higher mortgage payment they cannot afford.

Foreclosure Relief Scams

Foreclosure rescue scams involve con artists who promise to stop foreclosure, rewrite the loan, or take title to your home. They typically operate through illegally posted signs, phone calls, or personal visits to homeowners.

Scammers often charge a fee upfront before they provide their services. They might also ask you to make mortgage payments directly to them, which could put you in worse financial shape than you were before the scam began.

Foreclosure rescue scams are illegal in most states, and there are federal laws that protect homeowners from them. If you are a homeowner in danger of losing your home, contact a HUD-approved housing counselor for help. The agency can tell you about reputable agencies that can assist you in dealing with foreclosure.

Loan Scams

The process of buying or selling a home can be stressful, and it can also be an easy target for scammers. Real estate fraud begins with identity theft, which can lead to a thief using your name and title to sell, rent or take out a loan in your name – all without your knowledge.

Homeowners are particularly vulnerable to scams that can affect their mortgage payments or the equity in their home. These include shady foreclosure counselors, costly leaseback programs, fake loan auditing and bait-and-switch tactics.

In some cases, homeowners may even be contacted by a scammer who convinces them to transfer the title of their home to them. This can leave them with a property they can’t afford to keep. They’re then forced to refinance their home with a lender that charges high fees and points.

Landlord Scams

Real estate scams include a variety of ways landlords and property managers can take advantage of their renters. Scammers may try to impersonate landlords, steal property photos and information, or use fraudulent listings to lure tenants.

Scammers often create a sense of urgency to make you believe providing money right away is necessary, whether it’s to avoid getting evicted or to prevent utility shutoffs.

They also use vague wording in leases that allow them to manipulate important stipulations after you sign it.

A good way to avoid rental scams is to visit and tour the apartment in person. This can give you a better idea of what the property is like and the type of neighbors it has.