The hunt for the perfect home can be overwhelming. Uncertainty, legal jargon and load of waiting around can lead to a seriously stressful experience. Add in the risk of falling victim to scammers and it can seem downright terrifying.
It’s an unfortunate fact of life that scams are on the rise and criminals are using increasingly sophisticated tactics to trick unsuspecting victims into giving them money or personal information. Real estate scams are no different, with fraudsters out there ready to turn your search for your dream home into a nightmare. In fact, victims lost more than $396,900,800 to real estate scams in 2022, according to the FBI’s Internet Crime Report. So, before you get caught up in the excitement of choosing the perfect place, remember to take a breath and consider if there are any signs that suggest things aren’t as they seem.
What do we mean by real estate scams?
Real estate scams often involve criminals posing as legitimate buyers, sellers, or agents to trick victims into giving them money or personal information. Fake websites or listings, forged documents and fraudulent investment opportunities are just some of the deceptive tactics scammers work with to make their scams look real. In some cases, scammers may even impersonate real estate professionals, using stolen identities or false credentials to gain their victims' trust.
Examples of real estate scams
Fake rental scams
This is a common scam in which criminals post fake rental listings online and ask prospective tenants to wire money for a deposit or first month's rent. Once the money is sent, the scammer disappears, leaving you without your money and a place to live. In a fast-moving rental market where demand outstrips supply, it can be tempting to move quickly to secure a rental property before the competition. But always proceed with caution, remember to think before jumping in.
Mortgage scams
In this scenario scammers offer fake investment opportunities or promise to help homeowners with loan modifications or other financial help. Victims may be asked to pay upfront fees or provide personal information, which can be used to steal their identity or access their bank accounts.
Title scams
In this type of scam, fraudsters use false documents or identities to transfer ownership of a property to themselves. They may then sell the property to an unsuspecting buyer, leaving the original owner without their property or compensation.
Investment scams
In this type of scam, fraudsters may claim to have access to high-return real estate investments, such as rental properties or commercial real estate. They may ask for a large upfront payment or offer unrealistic returns on investment, but in reality, there is no investment and the victim loses their money. Learn more about investment scams here.
Signs to look out for
There are certain signs of scams to keep in your mind during your property search. Here are just a few that should make you stop and think before moving ahead:
Requests for upfront payments or personal information
Offers that seem too good to be true
Pressure to act quickly or sign contracts without reviewing them carefully
Strange communication (things like unprofessional topics or spelling and grammar errors)
Lack of a physical address or contact information for the real estate professional or company
How to avoid real estate scams
The best way to avoid falling victim is to do plenty of research and approach all opportunities with a healthy dose of scepticism. Here are some tips to keep in mind:
Only work with reputable real estate professionals who are licensed and have a proven track record.
Verify all information and claims made by real estate professionals or companies, including their licensing and accreditation.
Read reviews of the companies you’re working with to see what kind of experiences other people have had using them. You'll find a whole host real estate reviews on Trustpilot.
Use reputable online real estate marketplaces and be wary of deals that seem too good to be true.
Avoid sending money or providing personal information without first verifying the legitimacy of the opportunity.
Read contracts and other documents carefully before signing, and ask for clarification if anything is unclear.
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