Scammer: a person who commits fraud or participates in a dishonest scheme (to put it nicely). Unfortunately, most of us have had an encounter with a scammer at some point in the past 20 years. Whether it’s over the phone or through the internet, somewhere out there is a coward hiding behind a screen, claiming to be someone they’re not, attempting to steal other people’s money. As you can imagine, real estate opens many windows for these skilled illusionists, allowing them to prey on their victims by creating a mirage of opportunities. As a buyer, a seller, a REALTOR®, or a property owner, it’s important to know how they prey and what signs to look for.
One common real estate scam is the rental scam, where scammers advertise properties they don’t actually own or have the authority to rent. They entice prospective tenants with attractive listings and low rental prices, requesting upfront payments or security deposits before disappearing into thin air, leaving their victims empty-handed and financially devastated. If you’re looking for a property to rent, be sure to work with a REALTOR® or a reputable property management company. Visit the property in person and be wary of “landlords” or “agents” who request significant upfront payments, especially if they ask for cash or wire transfers.
As a seller, you should always be cautious of the “We Buy Homes for Cash” offers. While there are real companies that do buy homes “as is” for cash, there are also plenty of scam artists that will use this as a front. Their idea behind this tactic is to get the seller to sign over the deed before paying for the home. A good way to research the cash purchase companies is by searching the name of their business + “scam/fraud” to see what past customers (or victims) have said.
From a buyer’s standpoint, it’s important to be cautious of listings for sale that may seem too good to be true. Even as REALTORS®, we must be cautious when we get calls from someone who may conveniently live out of town but is wanting us to list their property. If correct measures aren’t taken, we could be listing someone else’s property without them even knowing it. The scammers are likely hoping for a cash buyer or even just earnest money to collect before disappearing. If somehow this deal were to go through, the buyer would be the main victim. The cash they paid would be gone, and they would be left with nothing to show for it. Of course, if the scammer succeeded at scamming the legit owner to sign over the deed, the seller and the buyer would both be in trouble.
These are only a few examples as there are many other tactics scam artists use in the real estate industry. Having a strong relationship with a REALTOR® and lender will go a long way in protecting you against these potential nightmares. Do your research and remember that if it seems too good to be true, it probably is. Happy Sunday everyone, be safe!
Eve Leombruno, 2023 MBOR President