How To Avoid Real Estate Scams

One of the most common tactics is for the scammer to pose as your real estate agent. They will trick you into wiring funds for closing costs to a fraudulent account. Unfortunately, these can be hard to spot, because the hackers will use special software to impersonate your realtor’s email address and phone number. Once you wire money to someone, it is usually gone forever.

The best way to protect against this scam is to understand the closing process. Ask as many questions as possible, especially in relation to how escrow is funded, what money will be required to close, and how that money will be delivered. If you ever receive an email asking for funds, always reach out and discuss with the realtor or lender prior to sending any payments.

Seniors are at the greatest risk here because most will have significant equity built up in their homes. They tend to be very trusting of people and can’t imagine that someone would try to take advantage of their demographic.

If lenders are actively seeking you out via marketing by phone, mail, or email, this could be a red flag. All lenders do marketing, but if you find one particularly aggressive this could be a warning. Especially if you have never contacted this company.

The best way to protect yourself whether or not you are a senior is to only work with lenders you know. It also doesn’t hurt to bring a friend along for advice when thinking about a refinance.

Scammers have access to public records and can tell if you have entered into pre-foreclosure due to missed mortgage payments. They claim they can help reduce mortgage payments but will charge large upfront fees, often leaving homeowners in worse shape than before.

One way they create credibility and trick people is by claiming they are affiliated with the government or government housing assistance programs. According to the Federal Trade Commission, these foreclosure relief scammers can swindle homeowners out of hundreds or even thousands of dollars in fees.

And how do you protect yourself?

If you are having trouble making payments or have already entered pre-foreclosure, contact your lender. It is so easy to avoid those phone calls, but when you do you make yourself a target to scammers.

Most lenders do not want you to default. It is expensive and loses them money. They will work with you but you need to talk with them. A scammer will never tell you to talk with your lender. It’s the last person they want you to speak to because they know the lender can help and the scammer will lose money.

If your home has become too big of a burden and there is no way out financially, the other option is to sell your house. Keep that in mind as you work through the process with your lender.

They take the title of the home with them. They never paid off the loan and you are still at risk of foreclosure and in a worse situation than before.

So, how can you protect yourself?

If you are facing foreclosure, talk with your lender, HUD counselor, the Federal Housing Finance Agency, or people you trust.

Inspections are necessary to the buyer so they know the true value of the home and what potential repairs need to be made. Sellers will often even do an inspection prior to listing their home to find any quick repairs they have overlooked that will make the home more attractive to buyers.

Here’s how the Inspection Scam works:

An unqualified provider performs an inspection but hides potential problems with the home. They may not even notice them, because they are just making a little extra money without any qualifications.

To prevent this type of fraud, do a little research on the inspector prior to hiring them. Make sure they are legit. Once they schedule the inspection, follow them around and make sure they see every part of the home and property. Then look at the report they create.

Doing these simple steps will prevent you from being taken by a fake inspector. Otherwise, the buyer or lender will know from the report and you will have to hire a legitimate one and repeat the process again.

Many times they are using Craigslist or social media to lure renters. The pictures may be grabbed from other properties. They will have no connection to the property and will ask for upfront money before you can see the property.

You may be surprised at how often this happens. In 2018, ApartmentList conducted a survey of renters. Around 5.2 million renters in the US said they had lost money from rental scams. One in three had lost more than $1,000 after paying a security deposit or rent on a fake property.

Check any listing photos for the MLS watermark. Also, always visit the property in person before agreeing to rent. Don’t ever sign anything or wire money until you visit the property. Be suspicious of any person who asks for a cash deposit upfront to see a property.

This happens all the time. In 2019, the Better Business Bureau received around 13,000 complaints about moving companies. It is so bad that the two largest moving companies - Mayflower and United Van Lines - partnered together to create MoveRescue. This is an organization to protect people who are moving and provide help when you’ve been scammed.

How do you protect yourself?

Moving is expensive. It is so tempting to go with the cheapest option. Unfortunately, you can’t shop just on price with a moving company. Ask the mover for their license number and see if there are any complaints with the Federal Motor Carrier Safety Administration.

We recommend getting 3 in-person or virtual quotes from different companies. If a company gives a quote just over the phone, that’s a red flag. Don’t give any big deposits in advance. Small deposits are normal to make a reservation, but better moving companies won’t require payment until the job is complete.

Even if you don’t lose your home, it can be a very expensive problem to fix. It’s not just a problem for homeowners, but also landlords who own rental property. The landlord or secondary homeowner is at the greatest risk because they don’t tend to personally oversee all their assets and will leave that to a management company.

It usually occurs during sales and refinance transactions. During this time, sensitive information is passed between various parties and scammers will try to steal this information.

How do you protect yourself?

Watch your property and notice if you see anything strange or amiss. If you notice that bills have been taken or missing or if your credit score has taken a hit you may need to do some investigating. Fraudsters will often pick off the information by disguising themselves as real estate professionals or even third parties such as title attorneys or closing agents.

So what can you do to protect yourself?

Work with reputable lenders and review all your closing documents. Make sure to use a secure closing portal when working with any connected with your home. This prevents document data from getting stolen or mishandled.