Common Real Estate Scams You Can Fall
Aug 16, 2022

It’s no secret that real estate can be an excellent investment. However, it’s also no secret that many people out there would like to take advantage of unsuspecting buyers and sellers. This article will discuss some of the most common real estate scams and hoaxes.

Criminals are undoubtedly becoming more creative in the way they target consumers. According to the Federal Bureau of Investigation’s Internet Crime Complaint Center, in 2021 alone, more than 11,578 victims reported real estate or rental fraud.

Knowing about these scams can help you protect yourself from becoming a victim!

Escrow wire fraud.

Scammers use phishing tactics to make phone numbers, websites, and email addresses look familiar. This is one of the most common methods.

How does it work? You receive an email, phone call, or text message from someone claiming to be from the escrow or title company with instructions on where to transfer your escrow funds. Scammers create fake websites similar to the title or loan company you are working with, so it looks natural. But in these cases, you can tell the fraud if you notice a number or letter that is usually wrong, something easy to miss at first glance but that you can look at closely.

Loan flipping and predatory lenders

Loan reversal is when a fake lender convinces a homeowner to refinance their mortgage multiple times. Usually, the loan amount is increased. Scammers charge high fees on every transaction, so homeowners are forced to pay higher loans they can’t handle after being tricked into borrowing most of the equity in their homes.

A red flag is when these criminals persistently look for you even though you and you have not asked for their help. Working with our professional real estate agents can prevent you from falling for these scams.

Foreclosure relief

When times are tough for homeowners and they fall behind on their mortgage payments, that’s when scammers show up. According to specialists, using public records of foreclosed homes, they launch offers of foreclosure relief to capitalize on the vulnerability of victims.

One of the hooks of these scammers to give the victim security is to ensure that they are affiliated with the government or government housing assistance programs, which is not true.

Fake listings and rental scams

A classic scam. Scammers frequently post property rental ads on real estate platforms or social media to lure unsuspecting renters, sometimes using photos from other listings. They are a property catfish.

The scammers have no connection to the property or its owner, but that won’t stop them from asking you for an upfront payment to let you view the property or hold it as a deposit. They are just looking to get quick cash through the Scam.

No matter the situation, you cannot trust any person or so-called real estate agent who asks for an up-front cash payment to show you a property.

Report real estate scams

When you realize that you might be the victim of a real estate scam, we encourage you to take action and go to the authorities.

You can take the first step with the Federal Trade Commission (FTC). When you file a report with the agency online, it is entered into a database that reaches local, state, and federal law enforcement agencies.

The BBB also gives you the option to file a complaint about their Scam. You can help alert others to possible fraud activity. You can also go to your state’s consumer protection agency.

If you’ve already been the victim of a scam, especially if you’ve given out private information, you’ll need to turn to IdentityTheft.gov.

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