Buying or renting a new home is already such a huge investment and the last thing you would wish for is to be scammed. However, today, fraudsters are being more creative and innovative than ever – there is absolutely no limit to their wicked minds.
So, if you don’t want to be their latest victim, here are some real estate scams that you should avoid.
Escrow Wire Fraud
A popular and highly costly real estate scam where homebuyers are taken advantage of is the escrow wire fraud. And, what’s more, dangerous is that this scam will appear to be perfectly legitimate and will use new technology to trick people.
The scam begins when a scammer gets a hold on the information of the closing of a property (The vendor can be a real estate agency or even a lender). Then, an email with the correct details will be sent to the home buyer (or it can also be a phone call or a text), which will look as if it comes from the title or escrow company or even the real estate agency.
Now, this fake email will appear “genuine” because it uses a method called email spoofing, a technique where email headers are forged so as to make it seem as if it comes from a legitimate source. And, we all know what follows: you fall for their scam, follow their fraudulent instructions and wire the money to an account (probably at a foreign bank).
And, by the time that little bulb goes off in your head, the fraudsters must have already withdrawn the fund and sailing into the sunset with your hard-earned money.
How to Protect Yourself From This Scam?
- Firstly, before carrying out any financial transactions, always check your original documents and call on the phone numbers listed on your documents.
- Never click on any links in emails or texts without proper verification.
- Even though it can be difficult to identify this type of scam, you can still look out for some signs, such as emails being sent outside regular business hours or emails with poor grammar and misspellings.
Are you desperately looking for a new apartment? And there, your “agent” comes to your rescue and shows pictures of an apartment in a super-hot building, that too at an affordable price. A real catch, isn’t it? So, eager to nab this deal, you wire the money and when it’s finally time for the key exchange, your “agent” is not answering his phone and has vanished. The reason why? Well, because he never even had the keys in the first place.
Another dangerous scam that is prevalent in many countries is when you end up buying a rental that does not even exist. Using social media or any other online platforms, scammers post property rental ads and use stunning photos to lure vulnerable renters. And, of course, these fraudsters have no connection at all with the property or its owner.
Once, they have trapped interested parties, they will ask for a security deposit and a first month’s rent via an electronic transfer. They will even claim to refund the money in case you don’t end up renting the property.
And, once you sent the money, the scammers go poof!
You will be shocked to learn that in the United States, nearly 5.2 million renters were fooled by this scheme and lost their money.
But, What Can Be Done to Avoid This Problem?
- Do not trust, I repeat, do not trust anyone who asks for a cash deposit before showing you the property as legitimate owners will never do this.
- Verify and make sure you are dealing with the rightful owner before going ahead with the rental project.
- Ask for their license or any referrals if they claim to be a real estate agent.
- Do not give out your personal information (that’s what kids are usually taught in general).
- If it’s possible, avoid making any financial transactions through your email or on your phone.
- Choose highly rated and well-established property management firms with a good reputation.
- With fake keys, some fraudsters can even show you the property. But, even then, don’t pay anything until you have it all established on legal documents.
The list of scams doesn’t end here and there are more to go. But, for now, we will take a small break as all these scams can corrupt the mind and right now, you and I need some time off these frauds.