The real estate market is a highly lucrative one. It calls to investors and business-savvy people across all walks of life. Unfortunately, it attracts scammers also, as a result of the huge gains in it. This article will explain a number of real estate scams to watch out for.
Who Carries Out Real Estate Scams?
In the real estate market, anyone can be a scammer. Sometimes, it might be a seller, a buyer, or a real estate agent. It could also be a hacker.
Scams to Avoid
You should watch out for the following real estate scams:
1. Papering Over the Cracks
Not all properties are maintained properly till it’s time for a sale. But when the time for a sale comes around, property owners get in a rush to make sure the property looks right to the buyer.
In doing this, there are a number of things that can be overlooked; faded or badly cracked paint, mold, rotten wood that is a result of termite infestation, etc. These defects can cost thousands to correct and maintain, and some sellers can touch them up to deceive the seller and pass the buck to them.
This is why we advise that you do your due diligence; ask for documentation that proves that routine inspections have been done, get a pro to inspect the property with you again, and take your time doing it. This is equally important whether you’re buying a rental property or a new home for yourself.
This will save you from being scammed of thousands of dollars in renovations and maintenance.
2. Unlicensed Real Estate Agents
It is a thoroughly bad idea from get-go, to deal with unlicensed real estate agents. A licensed real estate agent can be traced, in case complications in the deal arise. A licensed real estate agent is a trusted professional, as their license is a validation of their skills and knowledge as a real estate agent and protection against fraudsters.
This is why it is important to ask to see the license of a real estate agent when you’re interviewing them.
3. Listings on Online Classifieds
Everyone knows Craigslist. Basically anything can be found there. This is precisely why it’s a bad idea, a grave one one, in fact, to take real estate listings there seriously. They are usually duplicates of real listings on multiple listing services, and it is highly likely that anyone you reach from the contact info on the listing will be a scammer.
4. Title Fraud
This kind of real estate scam is complex and rare, but it is usually a sledgehammer to anyone who suffers it. It begins with identity fraud, and the usual sufferers are people with mortgage free properties. Mortgage free properties are usually easier to navigate with regards to identity theft.
Once the identity theft is done, the scammer will pose as the property owner with forged documents and leverage the property heavily to secure a mortgage. Once the cash is released, the scammer disappears with the money and leaves the original property owner to grapple with a heap of debt.
5. Wire Fraud
This type of real estate fraud is usually performed by hackers. Homebuyers are the usual targets of this type of fraud.
Hackers impersonate the real estate firms the homebuyer is dealing with, usually through mails or even by cloning their websites. The usual formula is that the hackers will send a mail to the homebuyers, disguised as the real estate firm.
The homebuyer will be asked to wire the list price to a particular account. Once that is done, the hacker disappears with the homebuyer’s money, and the homebuyer is left with neither their money nor the property
Knowing how to distinguish between a genuine deal and a fake one could be the key to saving you thousands of dollars, and a whole lot of heartache. You can also find Hobart real estate agents here.