Let’s face it, no one likes a scam. And unfortunately, they now go beyond the usual get rich quick and work from homes schemes. Believe it or not, real estate scams and hoaxes are very real and very common, so being aware of this and taking the appropriate cautionary steps are necessary in this day and age so you don’t become a victim. As hectic as finding a new home is, there is nothing like a bad scam to completely ruin a homebuyer’s experience. With that being said, here are a few examples of some scams to be aware of and tips on how to avoid them.
Lender bait-and-switch is a very familiar scheme. What happens in this situation is that buyers are offered a particular rate when they apply for a home loan, but are pressured to accept higher rates and charges to close the transaction. The consumer, who fears losing the loan, ends up agreeing to the new terms.
The FBI says that check fraud in association with rental real estate is also very common. Scammers will show interest in a property and send a check for the deposit amount to secure it, then back out of it at the last minute asking for a refund. The issue here is that most people will have already deposited the check, giving immediate access to the funds since many banks don’t hold personal checks. Later on it’s then discovered the check is counterfeit and at that point the account holder is then responsible for any fees and losses by the bank. Of course there are certain laws to protect people from being held responsible but it’s a headache nonetheless.
Another type of rental scam is the out of town owner hoax. Scammers place a stolen for sale ad online, passing it off as a rental property, and when someone shows interest in the property the “owner” will then claim they are out of the country and request that the interested party send the deposit wherever they are supposedly located at the time. Most of the time it’s a property that is a “steal” or a dream home for a low price. While some would think it isn’t possible to fall for this, many people do. If you find yourself in this situation, get curious and ask if someone is available to meet you and show you the house. If you have the address, pop up and scope out the house. All it takes is asking a few more questions than normal, and you will surely get the answer you’re looking for.
Bottom line, do as much research as possible. That means finding out as much about a person or company as you can, and make sure you get an actual person on the phone or in person. If you feel you’ve been scammed, or in the middle of one, be sure to report it to the federal government. Conduct business with companies who have good but verifiable reputations. Don’t just rely on internet reviews. Never give your personal or financial information over the internet or through email, and always remember that if it sounds too good to be true, it probably is.
Whether buying or renting, if you’re in the market for a new home it’s important to become familiar with what scams and hoaxes are out there before making any final decisions. Finding a reliable real estate agent is a great way to help guide you out of a sticky situation or help you to avoid one altogether. For additional information on purchasing or renting a home, contact Starting Point Real Estate.