How To Avoid Common Real Estate Scams

Navigating the real estate market can be complex, and unfortunately, it's also a target for various scams. By being informed and taking proactive steps, you can significantly reduce your risk. Below are some of the scams you need to watch out!

1. Wire Fraud

This is one of the most common and financially devastating scams. Scammers hack into email accounts of real estate agents, title companies, or other parties in a transaction. They then send a fraudulent email with altered wiring instructions, tricking the buyer into sending a large sum of money (often the down payment or closing funds) to the scammer's bank account.

How to avoid it:

 -Confirm all wiring instructions in person or over a verified phone number. Never use contact information from an email, as it may be fake. Call your agent or title company using a phone number you obtained independently at the beginning of the transaction.

 -Be suspicious of last-minute changes. If you receive an email with new wiring instructions, especially right before closing or on a Friday, consider it a major red flag.

 -Don't share financial information over email. Use secure portals or methods provided by your trusted professionals.

 -Slow down and double-check. Scammers often use high-pressure tactics to create a sense of urgency. Take a moment to scrutinize any request for funds.

2. Rental Scams

Scammers pose as landlords or property managers to trick prospective renters into paying a deposit or first month's rent for a property that is either not for rent, doesn't exist, or has already been rented to multiple people.

How to avoid it:

 -Always visit the property in person. Scammers will often make excuses for why they can't show you the property. If they refuse to meet you at the location, it's a major red flag.

 -Never pay a deposit or application fee before seeing the property. Legitimate landlords won't ask for money before a viewing.

 -Research the listing and the "landlord." Look for the same property listed by multiple people with different prices, or for listings with poor-quality photos and generic descriptions.

3. Title and Deed Fraud

This scam involves fraudsters using forged documents or stolen identities to illegally transfer ownership of a property to themselves. They might then take out a mortgage on the property or sell it without the owner's knowledge.

How to avoid it:

 -Regularly monitor your property records. You can check with your local land registry or county recorder's office to ensure your ownership status is secure.

 -Be wary of unsolicited offers. Scammers may contact property owners with unsolicited offers to buy their home.

 -Work with a reputable real estate attorney. They can help verify the legitimacy of all legal documents.

4. Fake Listings and Unlicensed Agents

Scammers create fake online listings for properties they don't have the authority to sell or rent. They may also impersonate real estate agents to gain a buyer's trust.

How to avoid it:

 -Verify the real estate agent's license. Check with your state's real estate commission or a similar regulatory body. Most states have a public license lookup tool on their government website.

 -Work with a reputable and licensed professional. A trustworthy agent will have an established history and be a part of professional organizations.

 -Conduct your own research. Don't rely solely on the information provided in an online listing. Research the property's history, and if possible, visit it in person.

General Prevention Tips for All Transactions

 1. Be wary of high-pressure tactics. Any attempt to rush you into a decision or a payment is a red flag.

 2. Trust your instincts. If a deal seems too good to be true, it probably is.

 3. Protect your personal information. Shred physical documents and be cautious about what you share online.

 4. Use secure communication channels. Avoid sharing sensitive financial details over unsecured email or public Wi-Fi.

 5. Consult with an attorney. Having a real estate lawyer involved in your transaction provides an extra layer of security.

 

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