Buying a house is a huge life milestone, and an expensive one at that. When you’re ready to start looking for your forever home, you’ll want to be wary of a few creative tricks that are sometimes used on first time buyers that simply don’t know any better. We can help you make the transition safely, and correctly.
In 2018, over 11,000 people reported real estate or rental fraud that resulted in accumulated losses of nearly $150 million. Here are a few common hoaxes and tricks you may run into during your home buying or renting journey, so you know exactly what to steer clear of to keep yourself safe.
Strangely enough, scammers will pull photos and descriptions of actual listings and publish them on other forums looking for offers, such as Craigslist, or other popular sites with a heavy amount of traffic. They’ll often list the existing property for a far lower price, making it appear to be a steal.
This is an extremely common practice, and it may be difficult to tell that the ad is fake. The goal of duplicating a listing and listing it for an insanely low price is to prompt buyers to jump on the deal quickly, then wiring money over to the supposed “seller” in a short period of time when prompted so they can take advantage of the deal before anyone else. The money in question is often asked for in the ad in the form of a deposit, an ‘application fee’, or an amount that will supposedly secure your spot as first in line for the home.
Once the transaction is complete, you’ll never hear from the user that posted the ad again. They’ll also become almost impossible to track down, and you’ll need to refer the issue to your local police department. It’s unlikely you’ll have the money you wired over returned to you, and obviously, you will never gain access to the property.
Be wary of listings posted on websites such as Craigslist, and always research properties online before you contact the supposed sellers for more information.
Sometimes, unlicensed people will pose as realtors in an attempt to process a transaction and deposit the money into their own account. These scammers don’t always come in the form of people that are complete strangers to real estate, either – some may have previously had their license, and may be trying to sell real estate with an expired license. This can often assign them more credibility if it sounds like they know what they’re talking about, and have a good understanding of the home buying process, making it easier to fool anyone that’s unsuspecting. Others may have no field experience whatsoever, just a strong online presence that allows them to trick potential buyers into using their ‘services’.
Just remember that a LinkedIn profile isn’t a substitute for a business card or an accredited agency – you should be careful about how you choose your representation, and make sure you do a thorough check on anyone that contacts you, or vice versa. It’s important to protect both your privacy and your finances when it comes to such substantial purchases.
If you ever receive a request by phone, email, or text that concerns your escrow funds, always err on the side of caution. Though it may come across as an innocent, even helpful request that directs you to a platform through which your escrow funds should be transferred to, you should always investigate very carefully.
Scammers will often construct fake websites and various platforms that they’ll direct you to, leaving you with instructions to wire the money through them. These will often look pretty convincing, as they’ll be designed with relatively the same branding and layout as the actual company’s website. This makes them very easy to trust, and people will often wire money over without a second thought. Make sure to examine these websites and all their contact information closely – you’ll often find typos, one or two letters being off, or strangely formatted information. You should also watch out for strange fonts and text that most professional websites won’t typically use. Logos and slogan differences are noteworthy, too.
Once that money is wired over, there’s a very small chance you’ll ever be seeing it again. It’s extremely likely that it’s getting transferred to offshore accounts to be utilized and avoid extensive tracing. Always be careful before wiring money to anyone for any reason – when in doubt, always verify the transaction, including the amount and location it’s intended to be sent to, by phone. Even if it is legitimate, you’ll feel so much better once you double check.
Calling to confirm a transaction amount before sending it will be very instrumental in protecting you from fraud. If you call your realtor, your lawyer, or your bank to verify the request and they immediately flag it, you’ll save yourself a world of stress, and potential severe financial losses. In many cases a suspicious transaction will be delayed, particularly if it is intended to be deposited overseas, or of a sum that is out of character for your account, and the transaction can be stopped. While it isn’t ideal to always count on this happening, there are some security measures taken when it comes to suspicious transactions. However, at the end of the day, it’s up to you to be overly cautious.
Have you ever seen an apartment in a very high end building listed suddenly, and you wonder how an apartment that great could become available at such a great price? Chances are, it isn’t.
Scammers may list desirable properties under their own contact information, knowing these properties are capable of generating a lot of public interest. When you contact whoever posted the ad for a viewing or more information, they’ll likely feed you a few different lines that always revolve around you not actually being able to access the property for a viewing. They may tell you you’re only able to view the outside of the building, or it’s currently closed for renovations and you can only see the online photos, etc. No matter what reasoning they provide, never invest emotionally or financially in a property that you haven’t stepped foot in, or corresponded with a realtor or landlord about. Better to be safe than sorry!
Scammers can be creative, and sometimes, you don’t notice the signs until it’s too late. If you discover you’ve fallen for one of their complicated tricks, it’s important for you to acknowledge the situation right away, and take the necessary steps to correct it. Some people feel too embarrassed to admit they’ve been a victim of a real estate scam, but ignoring the problem won’t make it go away. Reporting and spreading awareness can also help to ensure that other people can stay far away from these hoaxes. Reports can be filed here.
Always trust your instincts if something doesn’t feel right. Don’t be afraid to ask questions, perform research, or consult with a professional if something has put a bad taste in your mouth. If your instincts are telling you something is off, there’s a good chance you may be right – the home buying or renting process should be chock-full of transparency, so if you feel confused or like you’re being misled, it’s best to investigate. Be very wary of strange requests, especially ones concerning loans and home equity.
Another way to protect yourself from potential scamming and fraud is to be very cautious about receiving links and offers from addresses that don’t appear to be official, or affiliated with local agencies or corporations. You can report this activity to your local police department so they’re able to deter unsuspecting people from clicking the links, as well. The more you bring these scams to light, the less likely it is that more people will fall for them, and the safer you’ll be!
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