If you’re looking to buy or sell a home, beware of these five real estate scams. From fake listings to bogus contractors, there are plenty of ways for scammers to take your money. But with a little knowledge and caution, you can avoid becoming a victim. Read on to learn more about the most common real estate scams and how to protect yourself.
The “bait and switch” scam
The “bait and switch” scam is one of the most classic yet nefarious deceptive practices used by dishonest business owners. It usually starts with a tempting offer of an attractive property being advertised at a low price.
The consumer is enticed by the deal, only to be presented with something else upon arrival – something more expensive or inferior to the original offer. The theory is that once the agency has your attention in what is a very competitive world, then they can show you other more realistically priced properties. This false advertising is illegal in many jurisdictions, but that doesn’t always stop it from happening.
Businesses engaged in bait-and-switch tactics should be confronted when possible to prevent them from taking advantage of unsuspecting consumers. In any case, it’s important to remain vigilant and stay away from any business that might be utilizing this type of scheme.
It’s important to spend time finding the right professional to work with. Jerry Pinkas Real Estate recommends that you arrange to meet the agent prior to visiting the property. This will give you the opportunity to ensure that they fully understand your requirements, and you can check them out to ensure they are legitimate.
The “phantom listing” scam, where a fake listing for a non-existent property is posted online
The “phantom listing” scam is an increasingly common online fraud, preying on those who wish to take advantage of the convenience of online real estate searches. The scam begins when a malicious individual posts a listing for a property that doesn’t exist, complete with detailed photos and enticing descriptions.
When unsuspecting victims contact the listed number about viewing or purchasing the phantom property, they are connected to someone willing to collect on their interest — but not in selling them a home. The truth is revealed when the phantom listing is tracked back to its source and found fraudulent, leaving angry victims behind with a worse financial situation than before.
Although due diligence rarely comes up totally empty-handed, it’s important to remain vigilant when searching for homes online by only trusting listings from legitimate sources.
The “foreclosure rescue” scam, where someone offers to help you save your home from foreclosure for a fee
Each year, thousands of American homeowners find themselves at risk of losing their homes to foreclosure. As the prospect of foreclosure looms over them, some homeowners become vulnerable prey for scammers who guarantee to “rescue” them from foreclosure for a fee.
Unfortunately, such offers are too good to be true: these so-called “foreclosure rescue” scammers will often ask for an upfront fee – sometimes as much as several thousand dollars – but won’t deliver on their promises. The reality is that no one can guarantee foreclosure prevention, so it’s important to stay wary if you ever come across what looks like an offer too good to be true.
The “title insurance” scam, where you’re asked to buy title insurance when you don’t need it, or it’s not required
Buying title insurance can be a necessity for some homebuyers, but scam artists have seized the opportunity to falsely convince homebuyers that they need to purchase title insurance. Many unknowing and trusting individuals have fallen victim to these scams.
In real estate transactions, often, one party will try to take advantage of another by convincing them that title insurance is required when it’s either not necessary or not required. No matter how persuasive this person might seem, it’s important to always double-check all requests for services like title insurance when buying a home.
Don’t trust anyone who says it’s a requirement because no policies should be taken at face value in these processes. Doing your own research is essential, so you know your rights as a homebuyer – don’t pay extra money if it’s not necessary or required!
The “property tax” scam, where someone tries to get you to pay their property taxes for them
Property taxes are a necessary burden that all property owners must bear. Unfortunately, some scammers attempt to take advantage of individuals and try to trick them into paying property tax that isn’t due.
The scammer will get in touch, usually by phone, and pose as your local county office or the IRS. They will then state that they haven’t received payment for property taxes. Their next step is to offer to take payment over the phone, asking for card or bank account information, which they will use fraudulently in the future.
If you get a random call like this, always say that you will call back. Then, you can ring the department and check whether there is an outstanding payment to be made. Don’t be taken in by any phone number that the scammer gives you to call back; that will just take you through to someone else who wants to separate you from your money!
Our Summary
These are just a few of the many scams that are out there. If you’re ever approached with an offer that seems too good to be true, it probably is. Be sure to do your research and consult with a trusted professional before making any decisions about your home. Remember, if it sounds too good to be true, it probably is!