The real estate business has become the primary target for scams, from real estate seminar scams to wire payment fraud. Homeowners have lost billions of dollars per year from various real estate scams. Yes, there are many types of real estate scams that even become four-direction threats. Since they may differ from each other, there are also different ways to avoid them.
These are some common real estate scams you need to know and tips to avoid them for good.
Investment scam is a popular type of real estate scams with a massive number of victims. This type of real estate scam happens in two ways: lending scams and condition scams.
Lending scams refer to alternative mortgage loans. Lenders with no license provide the loans using private funding. This type of loan comes with high-trapping lending fees, which is usually unclear upfront. Condition scams refer to real estate scams where the agent appraises the property’s value at a much higher value than its condition. Agents typically do this because buyers are in the distance and unable to visit/check the property in person.
How To Avoid:
When it comes to real estate investment scams or lending scams, you need to reference a lender. If you want to pick one on your own, choose someone you can meet in person for a thorough interview. Whenever you want to use an online lending service, choose the reputable one. And do your research on the site and the local listing service.
On the other hand, buying properties without checking the physical condition isn’t advisable. At least, you need to hire a trusted appraiser to inspect and value the property you want to buy as the second opinion.
Another typical real estate scam is payment fraud, where the real estate agent scams take a role as an escrow company and send you faulty instructions to make a payment over real estate to their account. They’re real estate impostors of established agencies or brokers. Today, these fraudsters fake up websites of reputable brokers, real estate companies, and other property dealers.
They may also use a copycat email and phone number to personally contact and convince you with impressive real estate buy your house scam offers. You may need to transfer typically for down payment following their instruction. They’d get you if you follow the instructions and transfer the fund. In other cases, some fraudsters are even able to intercept communication between buyer and seller, so instead of moving money to the agency/seller, you’re sending the fund to the fraudster’s account.
How To Avoid:
Real Estate payment fraud and Meier real estate scam can be very convincing and strike accurately. At this point, you should always verify all payment instructions by referring to the written documents.
Loan Refinance Scam
Mortgage lenders mostly play this kind of real estate deed scams. They would typically drive homeowners to refinance their home credit and to take other principles. Each time the homeowner refinancing their mortgage, they’d usually become a borrower, and these predator lenders would charge high interest and fees to trap them with high loan payments. Once you get scammed with this scheme, it strikes your finance, and you’d hardly come out from the trap.
How to avoid:
Once you’ve completed refinancing your mortgage, there’s no need to make another batch anyway. If you have no specific requirement to refinance your mortgage, it’s unnecessary to take a new one. On the other hand, if you need to refinance your credit, always use reputable lenders or banks only. Ensure that you have all essential information, including fees, interest, penalties, and so forth. Read all written documents and seek clarity on anything that bothers your mind.
Mortgage Relief Scam
Mortgage payments can be challenging for many people’s finances after a while. Indeed, many of them resort to desperate measures to keep their property. Scammers look at the database and start offering mortgage relief to take advantage of this condition. Scammers would claim themselves as the government-affiliated officer and such fake mortgage relief programs. They’d then charge thousands of dollars for processing fees that they’re tricking the homeowners. While it looks convincing, it’s easy to recognize these real estate scams in 2019 for sure. These scammers would prohibit you from calling your current lender for whatever reason.
How to avoid :
Mortgage relief scammers are everywhere and appear to be a solution to your current mortgage, but they’re not. If you’re facing financial difficulties in paying your mortgage, it’s wiser to discuss it with your loan officer and take the counseling session with them. You can request a rollover whenever it’s suitable for your financial condition now and in the future.
It’s not only property owners, but renters have also become the target of scammers. They usually put fake property rental listings on social media platforms or local listing sites. As expected, they don’t have property or connection to the actual owner or real estate agency. They lure you with cheap rent prices and other services but require you with a down payment as a deposit before you can visit the property. Once you’ve transferred the money, you’d be unable to contact them anymore, and they’re vanishing.
How to Avoid:
Whenever you’re looking for a property to rent, don’t pay anything before you can visit the property and check the paperwork in person. Use the local appraiser and trusted website only to help you find a legit option. If you find the listing online, you can search the image reversely(searching by image) to see whether it’s an original listing or a copycat.
You should know that real estate investor scams come in various forms and modes. People are generally falling into scams as they can’t take some time to check details and question offers. It’s always advisable to check the real property and documents in person before making any payment. You can make use of our tips above to avoid different types of real estate scams targeting your hard-earned money.
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