6 Real Estate Scams That You Must Watch Out For

Real estate can seem like a pretty straightforward business. If you want to sell a house you go through the right channels same as if you want to buy a house. However, there are many scams out there that you should be wary of. These scams can get you into major issues and cause you to lose a lot of money.

Scams to Watch Out For

You may be super excited to purchase your first home and you may think that there is nothing to worry about. However, some people will try to take advantage of you and so you must do your research and be cautious. There are several ways that you can avoid house buying scams which some of which include making sure all the documentation is in order, you work with a reputable agent, and doing background checks on homeowners or sellers.

1. The Fraudulent Wire Account

When it’s time to close on your home, suddenly there’s an email in your inbox. The email will seem credible as all the correct information is there. You’re requested to wire transfer the funds to an offshore account. Beware of this as these are scammers who’ve stolen that title information and draw up false documents. If something like this shows up, always check with your agent and lawyer to verify the authenticity. If you aren’t careful you’ll not only not have the house you wanted but all of your money will be gone as well.

2. The Non-Existing Home

An amazing house or apartment comes in the listing in one of the best areas in town. The price also seems too good to be true. You contact the “agent” and they tell you that the place isn’t officially on the market. You believe you can’t believe your luck. The agent tells you that because it’s not on the market yet they only send you photos, videos and you can look at it from the outside. You pay whatever fees but when it’s time to get the keys you suddenly can’t get a hold of the agent. They aren’t answering your calls and you have no way to get your money back. You should always tour whatever home or apartment you’re interested in and do background checks on the agent.

3. The Cash Scam

Your house is up for sale. Maybe it’s been up for a while. All of a sudden someone is in a big hurry to purchase your home. They want to forego all the paperwork and don’t bother to do a background check on you or the home. They offer you cash upfront and you take it. This can get you into serious trouble as they could be using you to launder (wash money), through the purchase of your home. This can get you into serious trouble with law enforcement as it can appear that you are working with this person or persons in their criminal activity. You should always go through the appropriate channels when making anytime type of sale but especially with cash sales.

4. The Cover-Up

Sometimes to sell a home quicker and possibly for money, a homeowner may do some surface fixing up to cover up major issues. They could be trying to hide things like major cracks in the wall, mold, water damage, etc. They may lie on the property disclosure statement and get inspectors and real estate agents to work with them on it; promising a piece of the profit. You should get a reputable inspector to come in and do a second sweep. Pay attention to areas that seem to have had recent work.

5. The Foreclosure

In a drastic situation, a homeowner might put their home up for rent or sale. They may put the property at a reduced cost to attract more attention. You purchase or rent the home only to have the owner’s bank come in and claim the property. You are not in problems and out of a place to live. You must look into the homeowner and check the background of the home. Look into records to see if there have been any notices made about it.

6. The Vacation Swindle

A scam artist posing as an “agent” puts the house up for rent. They request you two pay a few months down before you can move in and all is well. Little do you know but you’re living in someone else’s home. The owners may have gone away on vacation or for work for a few months only to come back and find you living in their home. This can get you into serious problems as it may appear that you broke into their home. The scam artist of course is nowhere to be found. This is another reason why it’s important to check into your agent. Look for reviews and any other relevant information that lets you know the quality of their character and their work.

Hopefully, you’ve learned some tricks to be wary of when buying or selling your home. Scams are becoming more complex and sophisticated every day so you should always stay abreast of what to look out for in the real estate market.