Real estate scams are a type of fraud that can cost you thousands of dollars, or even your dream home. Scammers often target people who are new to the home buying or selling process, or who are desperate to sell their home quickly.
There are many different types of real estate scams, but some of the most common include:
- Fake listings: Scammers create fake listings for homes that are not for sale. They may use stolen photos and descriptions of real homes, or they may create fake listings for homes that don’t even exist.
- Overpayment scams: Scammers ask buyers to overpay for a home, often by claiming that the home is in high demand or that there are other buyers interested in the home.
- Wire transfer scams: Scammers ask buyers to wire them money as a down payment or earnest money deposit. Once the buyer wires the money, the scammer disappears.
- Title insurance scams: Scammers pretend to be title insurance companies and offer buyers low-priced title insurance. However, the title insurance is often counterfeit or does not cover the buyer against all possible claims.
- Foreclosure scams: Scammers target homeowners who are facing foreclosure and offer to help them save their home. Scammers may charge homeowners upfront fees, or they may convince homeowners to sign over their home to them.
- Rental scams: Scammers post fake rental listings for apartments or homes that are not available to rent. They may collect rent from multiple tenants before disappearing.
- Home improvement scams: Scammers offer homeowners low-priced home improvement services. However, the work is often done poorly or incompletely. Scammers may also ask homeowners for upfront payments and then disappear with the money.
- Investment scams: Scammers offer investors the opportunity to invest in real estate projects that do not exist or that are not profitable.
There are a few things you can do to protect yourself from real estate scams:
- Do your research. Before you buy or sell a home, or invest in a real estate project, do your research to make sure that the deal is legitimate. Check the seller’s or developer’s reputation, and be wary of any deals that sound too good to be true.
- Work with a licensed real estate agent or lender. A licensed real estate agent or lender can help you avoid scams and protect your interests.
- Never wire money to someone you don’t know. If you are asked to wire money as a down payment or earnest money deposit, do not do it. This is a common scam tactic.
- Get everything in writing. If you do decide to work with someone, get everything in writing, including the terms of the agreement and the price.
- Be suspicious of high-pressure sales tactics. Scammers often use high-pressure sales tactics to pressure people into making quick decisions. If you feel pressured, walk away from the deal.
If you think you may have been a victim of a real estate scam, report it to the authorities and to the Federal Trade Commission (FTC). You can also file a complaint with the Better Business Bureau.
Here are some additional tips for avoiding real estate scams:
- Beware of unsolicited offers. Scammers often contact people out of the blue with offers to buy or sell a home, or to invest in a real estate project. Be wary of any unsolicited offers, and do your research before you agree to anything.
- Be careful about what information you give out. Don’t give out your personal or financial information to someone you don’t trust. This includes your Social Security number, bank account number, and credit card number.
- Be suspicious of any fees that are asked of you upfront. Legitimate real estate transactions rarely involve upfront fees. If you are asked to pay an upfront fee, be suspicious.
- Trust your gut. If something doesn’t feel right about a deal, trust your gut and walk away.
By following these tips, you can protect yourself from real estate scams.