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Buying a home is undeniably stressful.
After all, it’s probably the largest purchase you’ll ever make and a significant amount of your hard-earned money is on the line. According to a 2018 survey conducted by Homes.com, an astonishing 50% of Americans say that buying a house is the most stressful event in modern life. All of that tension can leave you feeling scattered and more vulnerable than usual. And with so much cash to be had, real estate transactions are likely to attract some shady characters that are just looking to take advantage of you.
While having a savvy realtor on your side can greatly reduce the chances that you’ll become a victim of a real estate scam, learning about the cons that exist for unsuspecting home buyers is the best way to protect yourself.
Scam #1: Bogus listings.
Every property listing you find on the Internet isn’t legitimate. In fact, many listings are fraudulent and sometimes, interested buyers and renters even view properties that aren’t actually available. These scammers create ads for nonexistent properties or for residences that are already occupied. Others manipulate actual real estate advertisements, replacing the contact information that’s on the listing with their own details. Either way, these rouses can successfully collect money from those who fall prey to their schemes. If you reach out about an online listing and the responder tries to avoid showing you the available space, consider it a telltale sign that he or she has no association with the property.
Scam #2: Phony transfer funds.
Cybercrime can hit any industry, and real estate is no exception. In this swindle, the imposter masquerades as your lender, your real estate agent, or someone from your escrow company. They provide specific email instructions regarding where to wire your earnest money deposit, down payment, or closing costs into the escrow account. But when you follow these wiring directions, your funds don’t go into a legitimate escrow account, they go into the scammer’s account and your money is gone for good. Only respond to verbal requests for a wire transfer, never those sent via an email, and always consult your agent before proceeding with any step in the real estate transaction.
Scam #3: Title fraud.
In this double-whammy, identity theft and monetary theft both come into play. The scammer creates and forges fake documents to make it appear as though they’re the homeowner. Once the property title is in their name, the scammer then takes out a mortgage on your property, collects the cash, and leaves you responsible for paying off the new mortgage. Safeguard yourself from this swindle by taking out title insurance.
Scam #4: Loan fraud.
These con artists show up once you’ve finally purchased and closed on your new home. They present themselves as a “mortgage agency”, offering deals that may seem too good to be true (and they are!). For only a small upfront fee, these scammers say they’ll provide incredible discounts on your monthly mortgage payments and loan rates. Once you pay the initial fee, the fake mortgage agency goes away and is never seen again. To protect yourself from loan fraud, don’t accept any offers from unsolicited mortgage agencies. Never provide your bank account information or send funds unless you reach out first, conduct extensive background research, and are certain you’re dealing with a reputable source such as an established bank or lender.
Scam #5: Moving company ransom.
You’ve found the perfect home and you’re ready to live there yesterday. But you’re also completely overloaded with things to do, and moving is a huge hassle. You decide to forego the research and go with cheapest mover in town. You’re in for a rude awakening when the movers drive off with your belongings and hold them captive until you pay an additional amount. While it sounds unbelievable, this scam is actually quite prevalent. To avoid this hostage situation, conduct due diligence to ensure that your mover is registered and insured, and always get a written estimate. Be sure to have a representative from the moving company assess the cost of your move in person when they draw up the quote.
You may think a real estate con could never happen to you, but as identity theft and cyber scams become commonplace, getting swindled is a real possibility. Remember: if a deal sounds too good to be true, it probably is.
At Certified Title Corporation, we go above and beyond to provide top-notch customer care and an unmatched commitment to excellence. For more valuable information about how to protect yourself from mortgage and real estate deception, please contact our helpful team of professionals.
About Certified Title Corporation: Since 1994, attorney-owned Certified Title Corporation has been furnishing residential and commercial real estate stakeholders across the nation with robust title insurance, settlement, and escrow services. Renowned for their industry-leading reliability and exemplary level of service and quality, the Maryland-based company helps clients from all walks of life achieve their asset goals. To learn more, call (888)486-5511 or visit https://www.certifiedtitlecorp.com/.