Buying and selling a home is a big deal. There are so many things to consider and work out before you can finally close the deal. This process becomes even more complicated when potential or present homeowners realize that if they are not careful, they could become the victims of real estate scams. Although different attackers use different techniques, they all have the same objective: to walk away from the deal with a handsome profit. Whether you are buying a home or need help paying your mortgage, below are several common scams you need to know about.
1. Timeshare Resale Scams
Oftentimes when owners of a timeshare decide it is time to sell, there are obstacles. Vacation homes can be difficult to sell especially if they are in a location not frequently visited. In the end, most vacation homes sell for a small percentage of what the home was originally worth.
When you become desperate to sell your vacation home, this is the time frauds can step in and take advantage of your situation. Many scammers will con you with promises that they will find the perfect buyer for your home if you are willing to provide a specific fee. In turn, the scammer will disappear, take your money and leave you with no potential buyers or they will tell you they need more money to reimburse what the seller initially lost.
In order to avoid such a situation, make sure to check the background of the person who could potentially sell your timeshare. Additionally, if upfront fees are mentioned, this should be a red flag for a potential scammer.
2. Real Estate Listing Scams
Believe it or not, all the property you see listed may not be for sale. A good scammer can even from time to time allow potential buyers or renters to view a home which is not even available. It is easy for a scammer to put a fraudulent listing up or manipulate real estate advertisement in order add their information. No matter how this scam is formatted, frauds can successfully collect from people who vulnerably fall prey to these scams. Always make sure to be wary of sending money to a real estate or individual whom you have never met face to face.
3. Credit Repair Scams
If you are seriously considering renting or buying, raising your credit score is very important. Such an act can help you receive a better interest rate on your mortgage. Also, in some cases, a bad credit score could potentially hinder you from being able to successfully rent.
Although you may be desperate to lower a bad credit score, be wary of the scammers who prey upon those in need of credit repair. Often scam artist will try to persuade you to create a new identity or even convince you that you are the victim of identity theft and drastic measures need to be taken in order to remove the black marks from your credit history. Others will even promise to wipe your bad credit clean immediately. When bought into, such scams can result in issues greater than a bad credit score.
4. Mortgage Relief Scams
For those who worry about meeting their mortgage and fear a foreclosure looms in their future, there are legitimate organizations such as Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP) who help struggling homeowners. However creative thieves can take advantage of desperate homeowners.
Scammers looking for people worried about losing their homes often use the line that if you let go of the title to your home and let someone else rent out the house, it will work to your advantage until you can buy your house back. Another scam often used is convincing you that they can talk with your mortgage lender to negotiate a modification to the terms of your loan. Some thieves will even use the line that if you turn over your home while you try to apply for another loan, your chances of avoiding foreclosure are decreased.
As stated before, the best way to avoid such a scam is to ignore anyone asking for an upfront fee and also do your research into their backgrounds.
5. Dual Agency
A real estate agent or agency who represents the buyer and the seller can be tricky. In some states this is quite legal and has benefits such as convenience and can even help cut costs. Nevertheless, in some states, dual agency is prohibited and can be considered a scam. Because such an arrangement could cause a conflict of interest, this is often seen as unfavorable. In extreme cases, some dual agencies will even try to profit significantly by representing both sides of the transaction. If you decide to embark on such a relationship with your realtor, proceed with caution.
6. Emails Scams
As we all know email hackers are very common. They hack into accounts all the time and not only inhibit your ability to send emails, but they also send scam emails to your family, friends, and coworkers. The same is true with real estate agents. Often times hackers will access a realtor’s account and email individuals asking them to wire money. While professionals try to avoid such happenings by taking precautionary measures such as frequently changing passwords and avoiding unsecure wi-fi, accidents do happen. If you feel an email you have received is not from a real agent, check the verification of their license and find out as much as you can about their professional records.
7. Identity Theft
Identify theft on a real estate level can take many forms. One form can occur when a thief steals the identify of a homeowner in order to gain access to their title. After this, the thief will attempt to profit off the home or tap into the home’s equity. Additionally, an identity thief can use false documents or someone else’s identity to qualify for a loan.
In order to avoid such a disaster, it is a good idea to check your bank statements, bills, and credit reports regularly. Such a check can help you catch something shady before it goes too far. Also, when working with a real estate agent, always make sure they are taking the necessary precautions to ensure your information is kept private.
Although there are many scams out there to which homeowners are susceptible , there are precautions you can take to avoid disasters. By proceeding carefully, and doing thorough research, you can outsmart any scam artist who comes around.