Learn what you should be aware of regarding Real Estate scams this post in our series of scams – what to look for and what to avoid, and adding more information to our arsenal of tips to avoid being taken advantage of!
In most cases, the home that you want to buy or rent is being handled by legitimate agents, and you will have no problems. Beware of “great deals” or lower rent or sale price than what is currently available in the neighborhood, and you should be fine.
There are tips here for renters as well, so let’s start there…
1. Rental Scams – This one happens online, and works mostly on out-of-towners who are moving to a new city and need to find housing quickly. The ad has been created from information that is online legitimately, using ads for homes that are for rent or sale in one online marketplace, ie Kijiji. The scammer then uses a different online marketplace (Craiglist) to present their ad. You may actually be able to speak on the phone, but likely you cannot meet in person.
You are required to pay upfront for the first two months of rent. You pay, and show up on moving day to find someone else aleady living there! And you may not be alone, since the scammer likely did the same scam on other people.
Sometimes, the rental home is owned by someone who actually does work out of town, or it could be abandoned. The scammer then either finds a key on the property or has the locks changed. He tidies up and then proceeds to rent out the property, using offical looking documents. This can go on for months until the actual owner comes home to find people they do not know living in their house!
There are even cases of the legitimate homeowner, when facing foreclosure, renting out their house to get money to rent somewhere else. The new renters are then evicted when the bank takes over the home on the specified date of eviction.
There are also scammers who “rent” out homes that are legitimately for sale. They pose as a real estate agent renting out a home at less than market value to bring in more victims, and hosting an open house. All potential renters sign the same rental agreements (thinking that they are the only one), and pay the deposits. This one is scary because the agreements usually ask for a lot of personal information that can be used for identity theft.
The easiest way to avoid these types of scams is to NEVER PAY UP FRONT for anything unless you are sure of the renting agent. There are deals to be had, that is for sure, but those situations are few and far between. This post is simply for information purposes. You can check some ads with pictures by right clicking and choosing “Search Google Image” to see if it shows up in multiple places. You can also ask the neighbors if they know what is going on with the house; they usually know what is happening in their own neighborhood.
You can do some quick property searches using the address to see who the legit homeowner is, using land title searching or property tax records depending on where you live and the current laws. Which leads to…
2. Title Fraud – This does not happen very often, and is usually the result of some kind of identity theft. The title to the home is stolen and then the scammer applies for a new mortgage or sells the home. Related to this is…
3. Foreclosure Fraud – Which happens when owners cannot make their payments and are offered a loan to help them make their payments. Unfortunately, the loan payments are going to the scammer and the not the bank, and now the scammer also has the title to your home which they can use to remortgage or sell. Beware of upfront fees!
4. Property Investment Seminar/Courses – These are everywhere! Many of them use the names of big time investors or self-made millionaires to entice people to attend, and learn from the “masters”. They may sell overpriced books at the event, and will be encouraging all attendees to buy into real estate “deals” usually with very little time to research or make a decision. Sometimes they will offer to fly you out to look at a deal; if you do not sign up you may be on the hook for the flight and accommodations!
5. Home Improvement Scams – Well we have all heard about these right? Back in the 70’s there were guys selling aluminum siding door-to-door, getting you to pay in advance and then either doing shoddy work or disappearing with your money. It is the same old scam, but with a facelift.
Offers to reseal your driveway, repair your roof, or fix your whatever. The easiest way to avoid being scammed in this way to get references/recommendations, check credentials, get everything in writing and KNOW YOUR RIGHTS, such as the buyers remorse clause in local law that allows you to change your mind within a few days of making an arrangement. And once again, DO NOT PAY UP FRONT!
As well, you should never pay the full price at one time. Legit contractors usually ask for one third up front, one third halfway through the job, and the final third after completion. This allows them to have the money they need for tools, equipment, or materials to complete the job, without charging you full price up front.
Beware of: “I am only in town this week”. The problem at your house “is a safety risk”. “This deal is only for today” or if the person seems a bit sketchy. There are also ads in the paper for a great deal, but once the contractor arrives, the price is much higher, or there is more work to be done than previously thought.
Watch out for people who show up with some leftover products from another job and they are offering you a great deal so that they can use it up. Many times the products are inferior quality, and can create more problems. Or they are using black paint to reaseal your driveway, and it washes off in the first rain!
This type of “bait and switch” scam also goes for carpet cleaning at a “low, low price”. Always use companies that your friends or family uses, or that have been around for a long time and have a good reputation.
6. Movers holding your stuff hostage – Be sure to use a registered and insured mover and get everything in writing. I had this happen to me when I wanted a small amount of stuff moved from a city up north to my hometown in the south. The company made a deal with me, and then once I had left town they tried to charge me more. I had to ask a friend who lived up there to go over and talk to them before they would send my stuff to me at the price quoted.
Small time companies are known for these types of shady practices. If you are moving locally, you can hire your own truck and then hire movers separately to avoid this. For long distance moves, use legit companies who have been around and who have a reputation for quality work.
Here are few things to think about before getting scammed:
1. There is always a chance that an ad was posted with the wrong price. Mistakes happen, move on. If the price asked is much lower than most in the neighborhood, think twice! Do more research and do not act hastily.
2. Does the person that you are dealing with return your calls? Are they easy to get ahold of?
3. In the case of rentals, will they let you see it before asking for money? Do you have options for the times that you can view ie do they limit when you can view to a limited window? They may not want you to talk to the people who are currently living there or you could find out that the people living there are NOT actually moving out!
4. Do they ask you to wire them money, especially overseas? This is a scam. Many scammers use Western Union for their unsavory deals. This is a RED FLAG.
5. Beware of people giving you too much personal information, especially if it is a sob story. They may want your sympathy to put you off your guard while they try to convince you to buy their services. Scammers take advantage of the kind and caring nature of people, and they use this against you.
6. IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS!
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Please leave your comments about scams involving real estate, in the box below and like and share our content if you know people who can benefit from this information.
We can all avoid being scammed if do some research and keep up to date on all the ways that scammers are trying to take our money!
Thank you for reading and happy blogging!
14 thoughts on “Real Estate Scams”
Very informative post detailing on the list of scams and their modus operandi. Even though where I am, we face lesser of these scams due to the restrictions , that don’t mean there are no scams. It is a good insights especially on the many ways these scams can be carried out! Stay fearless and expose them out!
Hello Mimie and thank you for visiting today!
Here in North America, scams run rampant. You see articles in the newspapers and public service announcements of whatever scam is going around. Many people think that it will not touch them since most scammers target older people who they assume have lots of money to lose to them. It is horrible!
And now the scammers target people with cell phones, so no one is immune!
Hello, it is so sad to see the number of scams that are around these days so many people are dishonest and will whatever they can to steal from hard-working people. So happy to know that a post like what you are sharing is sounding the alarm for people to be on the watch. I hope those who come across what you are sharing will follow your advice. Very awesome post.
Hello Norman and thank you for stopping by today!
Yes, very sad. And the worst part is that I have more scam posts to write about 🙁
Good information to know. Thanks for posting! There are so many different scams out there it’s hard to keep up with them. Scammers are getting smarter by the second.
Hi Kayla and thank you for visiting today,
I am just hoping to help people to not be scammed. It started because I wanted to people to know what scams are so that they would know that WA is not a scam, but also it is public service. The more people who know what scammers do, the less people who are taken in by them!
This is a really useful site and I wish I had been more aware of real estate scams before I invested in a property in a foreign country, several years ago. I was naive and thought that because the property was funded by a bank, that I could rely on their integrity that the valuation on the property was correct. No such thing and I found out the hard way that banks have only greed not any integrity. I won’t bore you with a long story but it took me years to get out of it, before finally reaching a settlement with the bank. The agency which introduced me to the scam were receiving a payment from me to introduce below market value properties, but they were overcome with their own greed and scammed many people not only myself. You need to be very very careful in real estate. Burned.
Hello Alan and thank you for visiting today,
And thank you for sharing your story! How awful that you had to go through all of that. I have met countless people who were duped or almost duped by the door-to-door scammers selling who knows what. And recently I have seen a sharp increase on email scams in that section of my email program. I have personally encountered all kinds of romance scammers just by being on online dating sites. It is hard to determine who is honest anymore!
Times are tough and people are trying to save money, which makes it easier for them to be a victim. The scammers are probably second generation by now, learning from the pro’s, and you are for sure not the only one. I am glad that you have been able to put that behind you and have gained a bit from the experience.
Best of luck in the future!
Wow, that is a lot to be careful about when moving.
These guys are very creative with inventing new scams. I am glad I don’t have to move in the near future.
Thanks, Irma, it is good to have these kinds of information, also to help friends and family when they are planning to move
Hi Stefan and thank you for visiting today!
Yes, you just do not know what to expect until something happens to you…and then you know! I have had some good experiences with moving and some not so good experiences. It is best to ask around when it comes to renting, hiring movers, banking or really anything. I was so glad to discover fee-free banking and now I save almost $200 a year by not paying a fee just to keep my money at a bank…who knew? Well, I do now!
Great post Irma! I like the fact that this is a very real problem in some countries and people can be taken advantage of if not aware.
Thankyou for bringing light to these problems! Will share this around to help others!
Hi Jeremy and thank you for visiting today!
Yes, I think that it is a global problem as scammers are determined to fleece anyone who has money. This is just another reminder to be vigilant!
As a guy in his early twenties, I need to be aware of scams. People often play on my niceness, so it is extra critical for me to remain vigilant. I currently go to UC Santa Cruz and the rental crisis here is abominable. Unfortunately, there are many landlords taking advantage of tenets like myself. Thank you for sharing this article on real estate scams, especially the part about rental scams. I appreciate your depth and thoroughness.
Hi Alex and thank you for visiting today!
I hear ya, and it is happening in Vancouver as well as money laundering within the rental community. Real estate has put the prices through the roof and scams are prevalent. I live a couple of hours from Vancouver, and it is much less scammy here and when I was last looking to rent I chose to use a rental group which has apartment blocks all over the city. Not everyone has that option.
Best of luck to you!!