• Fri. Jun 14th, 2024

COMMON ESTATE SCAMS AND HOW TO STAY PROTECTED

Byfundretrievers

Sep 23, 2023
Property Scam Hoax Icon Depicting Mortgage Or Real Estate Fraud. Residential Properties Realty Swindle - 3d Illustration

Buying the perfect home is a dream venture that most people hope to do at least once in their lifetime in order to poise themselves to start their ideal family or just live life comfortably. However real estate has become a hot target for fraudsters worldwide, these criminals have numerous tricks with which they steal your private information including banking details and worse the title or deed to your property. Knowing the most common real estate scams that are rife and how they operate is needful to stay protected from them as you look to becoming a homeowner.

How they operate

Learning how these scams play out from start to finish is the first step. A major target for real estate scammers as one may easily guess is any individual or couple seeking to buy or sell a property and they could be struck using any of these basic tactics:

  • Fake real estate agents or agencies: fraudsters may sometimes create fake listings to attract potential buyers and make contact with unsuspecting buyers whether through emails or phone calls, convincing them that a property is the best choice for them and often offering a very competitive price, then subsequently coaxing them into making a hasty deposit or down payment on a property that may not even exist, as soon as full payments are received, contact with the fraudulent real estate agent or agency is completely lost.
  • Forged or stolen Titles: Real estate scammers are able to create doctored property titles to sell to unsuspecting buyers, some of these titles may even be stolen from previous owners. It is needful to do the necessary checks and make as much inquiry as possible before making any financial commitments.
  • Suspicious payment methods: Most real estate scammers opt for payment methods that are harder to chargeback, using mobile payment apps such as cash app or Zelle or western union wire transfer, these make it easier for the scammer to take the money and disappear without a trace as soon as payment is received.

Real estate scams to avoid

Mortgage Fraud

This type of real estate fraud has to do with impersonation, scammers would often collect as much information on a client’s mortgage plan as possible, from the home that’s being financed to the details of the payment plan. Often times this information is collected through Business Email Compromise where scammers intercept email conversations between mortgage companies and their clients. As soon as they have all the information, they make contact through phone call or email or even messaging claiming to be a representative of the mortgage company or the contact person whom they have been communicating to via email and subsequently presenting changes to the mortgage plan that would eventually lead the client or borrower to make a hasty payment to them directly.

Real Estate Wire fraud

This is one of the most prevalent forms of real estate fraud and is generally performing by intercepting payments made by a buyer to a legitimate agent by contacting the client with new payment details and claiming to be their real estate agent or some other representative from the company using information that has been accessed and stolen from prior conversation between the buyer and agent usually through BEC as explained prior.

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Foreclosure scam

The targets in this case are homeowners who cannot afford to make their mortgage payments and are faced with losing their property or folks who just need to sell off a property quickly for one reason or the other. Scammers show up as interested buyers ready to pay quick cash no matter the damage or faults with the house, they sometimes claim to be “home revampers” and would convince the target to sign off the deeds to a property to them before making any payments. After the deed is signed, they could resort to extorting the victim in exchange for giving signing the property back to the original owners.

Protect yourself from real estate fraud using these tips

  • It is important to fact check every change in information received from your mortgager by calling customer service or going to a physical office to get specific information.
  • Do your research on a real estate company or verify an agent’s identity before making any payments to them.
  • Avoid responding to strange emails offering unrealistic real estate or mortgaging deals because if it looks too good to be true, it likely is.
  • Use means of wiring payments that would keep you safe such as an escrow service.
  • When receiving emails which communicate changes to a mortgage payment or regarding closing a deal on a property, especially if it’s a large wire, make sure to take a critical look at the sender’s email as there would usually be very small and easy-to-miss differences between the real and fake email address which could expose a scam to you before you fall for it.
  • Make a final call to your agent to reverify payment details to ensure that your money is not going to the wrong destination.

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