Housing fraud is one of the most common scams worldwide. According to statistics from the Federal Trade Commission, over 2.4 million fraud complaints were filed in the US in 2022. Of course, each of us wants to believe that such a nuisance will not happen to them. But still, it is better to protect yourself in advance and know the possible types of property fraud. Let’s go; let’s not let the scammers fool us!
Real estate fraud refers to situations where individuals or agencies provide false information with the intent to mislead and subsequently enrich themselves. For example, the seller may give incorrect information about the area of the object, its condition, or amenities, thereby overestimating the actual value.
Consider the main types of property fraud in more detail
Substitution scheme
This is one of the most common schemes, especially in metropolitan areas. The scammer will advertise a property for sale or rent at a reduced price. When you call or send an email to find out more about the property, you will be informed that the property has already been sold or rented out, but there are other equally attractive options in the database. Fraudsters will try to persuade you to look at other usually overpriced properties.
To avoid this trick, collect information on realtors to ensure their legal basis for business. You can only agree to view in this scenario.
It’s advisable to exercise caution and seek clarity by asking several follow-up questions when presented with a significantly discounted offer that raises suspicions. It is essential to know why the property is rented at a loss, how long it has been vacant, why previous tenants left, the housing condition, and if any repairs are needed. If, in response, you hear monosyllabic or vague statements, you have likely stumbled upon a scammer.
Remember that sellers and landlords will never operate at a loss. Scammers may offer the same option to multiple clients, and the advertised photo may not match the actual housing condition.
Owner away
Often, in ads for sale or rent, there is a postscript: “The owner is temporarily away.” In 5 cases of such mentions, only one can be true. Scammers use this scheme to avoid showing housing before buying, to avoid direct questions, and, as a result, to sell a pig in a poke.
To avoid being deceived, do not make hasty decisions, do not rush to transfer money, and carefully weigh your every action. If you like a particular object, insist on personally meeting with the owner and viewing the property. If the owner is away, they will not rush you to buy. Sooner or later, they will return and give you access to the inspection room.
Payment for dubious services
It is a widespread scheme to deceive citizens of another country. Fraudsters from the United States see that they are foreigners poorly versed in local legislation. In this regard, illegal formulations and fees arise, such as paying for viewing the apartment or meeting with the owner, a down payment without inspecting the premises, etc.
Before depositing any funds, conducting a thorough inspection of the property and verifying all relevant documents is necessary.
Haste and false excitement
Attackers can instill a sense of false urgency, manipulating your emotions and preventing you from making an informed decision. In such cases, they talk about the unprecedented demand for the object and that buying it as soon as possible is necessary because there will be no other chance. Fraudsters force you to sign papers quickly and may request a bank transfer before visiting.
If you feel pressured at any point during the negotiation, don’t go with the realtors. Always try to meet with sellers or landlords in person, and most importantly, check for ownership and licenses.
Transferring money through insecure services
The apartment meets expectations, the documents are acceptable, and everything appears in order. However, the owner asks to transfer money to an electronic wallet, like PayPal or Google Wallet. Scammers will find many reasonable excuses for this but do not fall for their persuasion. Ensure you fully understand all the steps you are participating in. The signing of a contract or agreement must precede any payment.
To protect yourself, transfer money in cash against receipt or share online through services that provide checks indicating the addressee and addressee.
How to protect yourself from scammers?
Do not hurry
Hastily closing housing deals is a guaranteed path to disappointment and loss of money. Take the time to check the information about the object before closing the deal.
Check Documents
Before buying a house or apartment, request a certificate confirming the ownership of the property you are interested in. Another document that should be required if the seller is not the owner is the right to sell.
Check information
Be sure to research all realtors and brokers that are involved in the buying or selling process. If you use the services of an agency, study its portfolio, read reviews, and do not hesitate to ask for a license.
Request an independent property appraisal
Obtaining an independent appraisal of the property you plan to buy or sell will give you an idea of fair value based on market rates.
Be sure to check out the property
Viewing photos does not give a complete picture of the housing quality, its advantages and disadvantages. The ad may intentionally omit references to specific defects to create a more attractive image. If possible, visit the property in person or request an online tour.
You are not at risk of being scammed by having a professional by your side during the mortgage process. Contact LBC Mortgage for advice — while you are choosing your dream home, we will take care of the documentation and selection of financing for your situation.
