Real Estate Scams and How to Spot Them
Real estate scams have been around as long as the mortgage. The sad thing is, the scams are becoming more and more sophisticated over time. Consumers might not be aware it’s possible to be scammed, and all the paperwork is already signed and complete. But what do you do if a fake company comes around and tells you that there are government affiliated agency promising to help modify your mortgage?
That’s exactly what happened to one homeowner who was swindled out of $10,000 for so-called processing fees. The scams seem to change depending on what’s going on with the economy. When flipping homes was the incredibly popular thing to do while the economy was at a low, scammers turned their attention to people who were facing foreclosure to get them out of their homes quickly.
Or maybe ‘gurus’ decided they wanted to make a few extra bucks, so they sold these courses on how to get rich really quickly in real estate. They’d charge thousands of dollars for these courses, but they weren’t even worth the paper they were printed on. As technology continuously changes and evolves, the scams will continue to become more elaborate.
Let’s take a quick look at some of these scams see how to spot them in the future.
This is one of the easiest scams to commit. As you can imagine, everyone would love to modify their loans to save a few bucks. And when someone shows up at the door or calls you claiming to be from the government, it’s hard to say no. He still a lot of money on your mortgage, your easy prey for the scammers who offers all kinds of help in saving you money.
Another way they can get you is by creating a fake lawsuit. They’ll call you pretending to be an attorney or other authoritative party asking if you join the lawsuit against the mortgage company. Perhaps the story will involve your neighbors as he claims everyone was screwed over and those lawsuits is the only way to get lower payments and freedom from foreclosure.
All you need to do is pay the upfront lawyer costs. If you ever want to know something is a scam, upfront costs are the huge red flag you need to pay attention to. Someone tries to get you involved in upfront cost or fee, then you need to pull away from that situation and do some research before agreeing. Call your mortgage company and report the encounter to make sure everything is legit and get advice from legal representation.
This scam is like the first one. Over 90% of consumers these days look at the Internet first before any other source when looking for a place to live. Because of this, realtors have a real heavy online presence to try and grab your attention. So, what’s to stop someone from pretending to be a realtor?
A lot of the scammers will find a listing online, steal the information, and repost it as their own. Let’s say you happen to find their listing and not the legitimate one. You call them up and arrange for a meeting. You think you’re talking to a real agent, here are willing to give a security deposit or a broker fee.
Again, the key is to look for upfront fees. They might even want you to send money to a friend or someone else just to make sure that you’re serious about the transaction and hiring them. They’ll disappear with your money and you’ll never hear from them again.