Buying a house is already stressful and overwhelming enough due to the highly competitive and fast-changing real estate market. Unfortunately, this process entails making quick and uninformed decisions when spotting the option you deem perfect for your budget and needs. This is the ideal scenario for real estate scammers to take advantage of. Here, we will detail all of the ways that you can protect yourself from the most common real estate scams.
Most frequently, real estate scams mean misrepresenting the terms of the buying agreement. In some nasty cases, people might even trick buyers into paying for nonexistent properties. For example, seeing an ad such as ‘sell my house fast for cash’ should make you wary, unless you’re dealing with a trustworthy company that offers cash for properties no matter the state they’re in.
Below, you will find vital information about several of the most common real estate scams. These include wire fraud scams, home inspection scams, foreclosure relief scams, rental scams, commercial real estate scams, and some more.
Continue reading to learn more about protecting yourself from falling prey to real estate scams.
Foreclosure Relief Scams
Foreclosure relief scam is one of the most common real estate scams. This type of scam is commonly used on people who are looking to buy foreclosed properties. It is also commonly used on people who are looking to buy properties where foreclosure has already been initiated. The scammers might promise you they can stop the foreclosure action on a home or even help you obtain a loan for buying it.
But after taking your money and promising to reach out to the bank and deal with the whole situation, they will simply disappear. They will then leave you without your cash and without any real solutions to your problem.
How Does It Work?
Scammers will usually create websites that pose as official websites of various financial institutions. They will claim that they can help you with your foreclosure problems. Don’t fall for their lies!
Instead of contacting your bank or mortgage lender directly, they will ask you to give them personal information about your finances. Scammers will claim they need this info for documents needed to submit a foreclosure assistance request. Once they gain access to your personal info, they might even use it to steal your identity.
Avoiding Foreclosure Relief Scams
To avoid this type of scam, make sure to contact your bank directly if you are facing foreclosure issues. If English is not your first language, you might want to go through this process with the support of a translator. There are many great translation services out there – click here to check translation services cost.
Never provide any personal information via email or phone! We also recommend to conduct research about all websites offering help with foreclosures. If something seems suspicious or doesn’t look right, it probably isn’t.
Also, never pay for something upfront. Legitimate companies don’t require payment in advance. Lastly, try reaching out to friends who have already dealt with similar situations and ask them about their experience.
Wire Fraud Scams
Wire fraud cams are the most common real estate scam. It is the most common one especially among first-time buyers. This is true as they who are often targeted because of their lack of experience and naivety. They are usually scammed by people pretending to be real estate agents under the guise of a local property management company.
How Does It Work?
In most cases, the scammers will use the name of a legitimate realtor or agency and pose as a realtor or representative from a bank or an attorney’s office. The moment you send them a wire transfer, they will disappear with your money.
Avoiding Wire Fraud Scams
To avoid wire fraud scams, it’s imperative to conduct thorough online research before you decide to work with a particular realtor or agency. Also, always pay close attention to details and verify names and addresses on official documents. In addition, make sure to sign the deal only once you receive a written contract from a licensed attorney.
Home Inspection Scams
This scam is common among those selling their homes because the home inspection provides a legitimate explanation for any deficiencies in the home’s condition. It’s a lucrative opportunity for scammers.
How Does It Work?
The home inspection scam works in two ways. The first one being that a scammer poses as a licensed home inspector and gives a fake report that exaggerates defects or makes fraudulent claims about home conditions. Another method is that the scammers hire a legitimate home inspector. The inspector then keeps part of the fee and tells you there are problems with your house. This way, they will feel no remorse about taking advantage of you.
Avoiding Home Inspection Scams
To avoid becoming a victim of this type of scam, it’s vital to choose an experienced and credible home inspector. Don’t be afraid to ask for references and testimonials from previous clients. You can also ask for an inspection report and compare it with others on the market. Remember that you don’t have to accept the first offer. There are many qualified inspectors out there who will do an excellent job at a reasonable price.
Many renters are unaware that rental scams are prevalent nowadays. While moving into an apartment might seem like an easy thing to do, it does involve making decisions that can lead to unpleasant surprises.
For example, you might end up paying higher rent than initially agreed upon or dealing with broken appliances or faulty utilities. Although renting an apartment is not usually complicated or risky, it could still become problematic if you ignore some important things.
How Does It Work?
The majority of tenants are usually scammed by landlords pretending to be someone else or by landlords themselves. You can easily fall prey to this type of scam if you fail to check out the apartment before signing a lease agreement.
Avoiding Rental Scams
Besides avoiding any risk associated with signing a lousy lease agreement, you should also keep an eye out for anything suspicious before handing over your money.
For example, check whether the landlord is actually the owner of the property or not. Another great way to protect yourself is to get in touch with your local authorities before signing any agreement. They should be able to provide you with information about any potential scams that have been reported in that area recently.
Last but not least, get in touch with your local tenant association and find out what other tips and tricks they would recommend to protect yourself from scammers.
The Most Common Real Estate Scams – Summary
Real estate scams are a problem that may be very difficult to prevent. There are, however, some safety measures you can take to minimize the risks. If you want to buy a house, make sure you’re well-informed about the process and hire a reputable realtor. Also, do extensive research before contacting a company or individual.
We hope this article helped educate you about real estate scams and how to avoid them. For more articles like this, be sure to visit the real estate section of the site.