What is a Real Estate Scam?
Real estate scams are strategies used by scam artists to take advantage of unsuspecting buyers, sellers, tenants, and landlords. Often, these schemes involve individuals or businesses deceiving potential investors into signing contracts that are fraudulent or not in the buyer’s best interest. In some cases, the scammers may even pose as real estate professionals or mortgage relief companies. Scammers often target vulnerable individuals, such as the elderly or those with limited financial resources.
According to the Federal Bureau of Investigation (FBI), real estate fraud is a growing problem, with the FBI’s Internet Crime Complaint Center (IC3) receiving over 791,000 complaints of internet-related crimes in 2020 alone.
Common Real Estate Scams
Below are some of the most common real estate scams being committed in today’s market. Making sure you are familiar with these scams and what to look for is critical if you are looking to buy or sell a property in the future.
1) Fake Listings & Rental Scams
Fake listings involve scammers posing as realtor agents offering rental properties at incredibly low prices compared to market values (usually less than $1000 per month). Usually, these scammers will ask for money upfront before showing buyers around the property – after which point, they’ll disappear without a trace (and with your money). Fake rentals may even involve stolen properties where criminals claim ownership over properties they don’t own so that they can acquire larger sums of money through fake leases or sale contracts.
How To Protect Yourself: Avoid participating in off-market transactions if possible; only work with verified sources like realtors and reputable websites when looking for rental/sale opportunities. Completing an online people search through PeopleFinders to verify the identity of the person listing the property is one of the easiest ways to confirm the legitimacy of the deal. If you are moving to a new area and cannot tour the property in person, you can also complete a reverse address search through PeopleFinders to identify the current owner and make sure details of the listing match public records.
2) Escrow Wire Fraud
Escrow wire fraud occurs when burglars pose as representatives from escrow companies looking for wire transfers related to closing costs associated with certain properties – however, instead of transferring funds into legitimate escrow accounts, these fraudsters transfer money into fake accounts owned by them instead to steal large sums of money before disappearing without a trace. The scammer may use phishing emails or fake websites to impersonate a legitimate company and direct the buyer to wire the funds to a fraudulent account.
How To Protect Yourself: You can easily verify the identity of the escrow representative, their contact phone number, email address, etc., by completing an online search through PeopleFinders. Never believe someone claiming they’re calling/emailing ‘on behalf’ of another organization unless you’ve independently verified this information first beforehand.
3) Fake Home Inspections
Fake home inspections occur when a scammer poses as a licensed home inspector and inspect a property, providing a false report to the potential buyer. The scammer may use this false report to convince the buyer that the property is in good condition, hiding any potential problems with the property. The scammer may advertise their services online or through classified ads or approach potential buyers directly. They may also provide fake credentials, such as a fake license or insurance, to make the inspection appear legitimate.
How To Protect Yourself: To protect yourself from fake home inspections, it is important to do your research and only work with reputable and licensed home inspectors. If you aren’t sure of the home inspector’s background and were not referred to them by someone you trust, you confirm their credentials and licensing by checking with your state’s regulatory agency.
4) Foreclosure Relief
Foreclosure relief scams occur when a scammer offers to help a homeowner facing foreclosure by promising to negotiate with the homeowner’s lender or to provide legal representation to fight or delay the foreclosure and because most people facing foreclosure are in a highly stressful and emotional state, they believe the scammer without verifying any information. The scammers usually request a fee and/or personal information, such as the homeowner’s social security number or bank account information, but once the homeowner’s identity has been compromised and finances drained, the scammer disappears.
How To Protect Yourself: To protect yourself from foreclosure relief scams, it is important to be skeptical of any unsolicited offers of help. Never pay for services upfront and be sure to confirm the legitimacy of any company or individual that offers foreclosure relief services. You can quickly verify the identity, contact information and even criminal history of anyone claiming to be working for a business you are not familiar with by completing an online search through PeopleFinders.
How To Report a Real Estate Scam
If you have been involved in a real estate scam of any kind, you should contact the FTC and your mortgage provider or lender immediately. They can provide you with information on how to best manage the situation and may also be able to assist you in recovering any lost funds.
If you feel you are in danger or have been threatened in any way, be sure to file a report with the local police. By reporting a real estate scam to as many agencies as possible, you can help to protect yourself and other potential victims and bring the scammer to justice.
Protect Yourself with PeopleFinders
Real estate scams can take many forms, and it is important to be aware of the warning signs in order to protect yourself. Always be skeptical of unsolicited offers, research before making any decisions, and verify, verify, verify.
Making sure the real estate offer and the people offering it are truly legitimate is critical before signing on the dotted line for any real estate transaction. You can complete this verification by entering a name, phone number, address, or email in PeopleFinders and clicking “Search”. PeopleFinders gives you access to over 120 billion public records nationwide and can supply a comprehensive, accurate and current report in mere seconds, giving you all of the information you need to make sure you never become a victim of a real estate scam.
