Red Flags for Real Estate Scams

scary postcard FRONTRequests to wire funds via MoneyGram or Western Union. A money wire is the same as cash. Most scams involve a request to wire funds. Do not wire funds to anyone you haven’t met personally, and do not accept wire funds that you did not initiate.

Long-distance landlords. Most scams come from users in foreign countries who claim to be interested in purchasing or renting out a home. Be wary of claims from people who are contacting you from abroad saying they are missionaries, U.N. workers, or in the military.

Requests for verification codes. If asked to provide a code sent to your cell phone via text or phone call, this is often a scam. I haven’t yet met a real owner, landlord, real estate agent or property manager who uses this practice.

Requests for personal or financial information. Do not provide your bank account number or Social Security Number to any unknown sources. First verify it is a trusted source and then only provide this information sparingly.

Individuals claiming an affiliation with one of the major real estate sites, such as Realtor.com, Zillow.com, Trulia.com. These are sources of information only and not involved in any transactions between buyers and sellers, renters and landlords, or borrowers and lenders. They also do not handle escrow or exchanges of money between parties. Any such offers are fraudulent activity.

Typos and sob stories. Emails filled with spelling and grammatical errors are usually a sign of fraud – professionals will get their text right. British spelling such as “favour” instead of “favor” is often a sign of a scam. Messages involving stories of family or financial issues, or stories of agents who charge too high a premium are usually fraud.

Avoid scams

Always use a licensed real estate agent who works for a reputable real estate broker. There are also professional property managers for renters. Real agents will be happy to meet you in person, take your call at their office, and other things that make you feel comfortable. A licensed agent has access to tons of information to help you verify that a deal is real, and what it should cost. Check out the company’s website. Check out the agent’s personal information listing, including their photo so you know what they look like (agents notoriously LOVE to post their photo!). Ask and verify identification – a reputable agent will be happy to comply.

Go with your gut and trust your instincts. If something seems too good to be true – it probably is. If something feels “off” – it probably is.

Never let someone pressure you into signing anything. And never sign an agreement for a real estate transaction you cannot afford.

Refuse to pay cash for a service (cash includes wiring money), and protect your personal information – especially your social security number.

Do not pay for home loan or foreclosure relief services in advance.

Be suspicious of a real estate agreement or home loan agreement you do not understand or contains blank spaces. Blank spaces allow a scam artist to fill-in-the-blanks of an agreement you already signed.

Do not sign your home over to a third party or anyone else who claims such a transfer can and will help you repair your credit or keep you in your home.

Never sign a “power of attorney” giving rights to your property or money to any individual or any company you do not personally know or trust.

Monitor and periodically check the title to your real estate holdings, as you would your credit reports and act immediately if you detect fraud. A warning bell should sound if you stop getting your property tax bill or notices, get real estate documents in the mail for a transaction you did not make, or if you receive a notice of default on a home you own outright or is current on mortgage payments.

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