Can You Live in a Commercial Property?
Written by webtechs

Common Real Estate Scams

Real estate scams can take many forms, targeting both buyers and sellers. Here are some of the most common real estate scams and tips on how to protect yourself from them:

1. Wire Fraud

  • How It Works: Scammers hack into email accounts of real estate agents or buyers to steal sensitive information about transactions. They then send fake emails, posing as the agent or title company, instructing the buyer to wire money to a fraudulent account.
  • Protection: Always verify wire instructions by calling the known phone number of your agent or title company. Do not rely on email instructions alone.

2. Rental Scams

  • How It Works: Scammers post fake rental listings on popular websites, using photos and descriptions from real listings. They often ask for a security deposit or first month’s rent upfront, sometimes even before you’ve seen the property.
  • Protection: Verify that the listing is legitimate by contacting the property manager or owner directly through official channels. Never send money without verifying the authenticity of the rental.

3. Foreclosure Relief Scams

  • How It Works: Scammers promise to save homeowners from foreclosure for an upfront fee, then disappear with the money without providing any assistance.
  • Protection: Be wary of any company that demands payment upfront for foreclosure relief services. Consult with a HUD-approved housing counselor or your lender for legitimate assistance.

4. Bait-and-Switch Schemes

  • How It Works: A scammer advertises a property at an incredibly low price to attract buyers. When potential buyers inquire, they are told the property is no longer available and are then pressured to consider more expensive options.
  • Protection: Be skeptical of deals that seem too good to be true. Always research and verify the availability and price of the property before proceeding.

5. Title Fraud

  • How It Works: Scammers steal the identity of the homeowner and forge documents to transfer the property into their name. They can then take out loans against the property or sell it.
  • Protection: Regularly check your property records to ensure your title is in your name. Consider purchasing title insurance, which can protect against title fraud.

6. Fake Buyers or Sellers

  • How It Works: Scammers pose as legitimate buyers or sellers to initiate a transaction, then disappear after receiving a down payment or deposit.
  • Protection: Verify the identity of the buyer or seller and use licensed real estate professionals to handle transactions.

7. Phantom Property Scams

  • How It Works: Scammers advertise properties that don’t exist or aren’t for sale, asking for personal information or deposits.
  • Protection: Verify the existence and ownership of the property through public records and official channels before providing any personal information or money.

8. Escrow Wire Fraud

  • How It Works: Scammers intercept communications between the buyer and the escrow company, providing fraudulent wire transfer instructions.
  • Protection: Always verify escrow instructions by calling the escrow company directly using a verified phone number. Do not rely solely on email instructions.

9. Loan Flipping

  • How It Works: Predatory lenders convince homeowners to repeatedly refinance their mortgage, each time charging high fees and points. This leaves the homeowner with increased debt and often higher interest rates.
  • Protection: Be cautious of frequent refinancing offers. Consult with a financial advisor or trusted lender before agreeing to refinance.

10. Deed Theft

  • How It Works: Scammers forge the homeowner’s signature on a deed transfer, stealing the property out from under the homeowner.
  • Protection: Monitor your property records and report any unauthorized changes immediately. Title insurance can also offer protection against this type of fraud.

Tips to Avoid Real Estate Scams

  1. Use Licensed Professionals: Always work with licensed real estate agents, brokers, and attorneys.
  2. Verify Identities: Confirm the identity of all parties involved in a transaction.
  3. Secure Your Information: Be cautious with your personal and financial information. Use secure communication channels.
  4. Get Everything in Writing: Ensure all agreements and transactions are documented in writing.
  5. Stay Informed: Keep up-to-date with common scams and new fraudulent tactics.

By being aware of these common real estate scams and taking proactive measures to protect yourself, you can significantly reduce the risk of falling victim to fraudulent schemes.

Real Estate Expert Witness Services by Craig Cherney, Esc.

Craig Cherney is a trusted client advisor and a sought after real estate expert witness who is hired by the nation’s top Real Estate Litigation Attorneys to help resolve their litigated real property matters.  Craig has appeared as a testifying expert witness before judges and juries in California, Arizona, Nevada and other jurisdictions across the country. Craig Cherney, Esq. Expert Witness Real Estate480-399-2342.

Leave a Reply

Your email address will not be published. Required fields are marked *