Don’t Get Duped! 4 Common Real Estate Scams and How to Avoid Them

The thrill of finding your dream home or a perfect investment property can quickly turn into a nightmare if you fall victim to a real estate scam. Unfortunately, fraudsters are lurking in every corner of the market waiting to take advantage of unsuspecting prey. Whether you’re buying, selling, or renting, it’s crucial to be aware of these scams to protect your investment and your peace of mind. Here are some of the most common real estate scams as well as tips on how to steer clear and protect your hard-earned money.

Red Flags: Warning Signs of a Scam

Spotting a scam before it’s too late is essential, so knowing the possible signs of a scam is your first line of defense. Here are some red flags to watch out for:

Unrealistic Deals: Be wary of listings offering dream properties at unbelievably low prices. If it sounds too good to be true, it probably is.
Pressure Tactics: Legitimate transactions involve time for due diligence. Scammers pressure you to rush into decisions, often with the excuse of high buyer interest.
Wired Funds Requests: Never send money via wire transfer to someone you haven’t met or verified through a reputable source.
Lack of Documentation: Always ask for proper documentation, like titles, inspection reports, and lender information.
Unfamiliar Individuals: Be cautious of unsolicited calls, texts, or emails from people claiming to be agents, lenders, or buyers. Verify their credentials through trusted sources.

Common Real Estate Scams to Watch Out For

Scammers come up with new schemes all the time, and it is difficult to keep up with all of them. However, some of the most common ones include:

Wire Fraud: In a wire fraud scam, scammers hack into email accounts of real estate agents or title companies. They monitor transactions and, at the critical moment, send fake instructions to homebuyers, directing them to wire money to the scammer’s account.

How to Avoid it:

Verify instructions – Always verify wire instructions via a phone call to a known number, not the one provided in the email.
Be skeptical of changes: Be wary of any changes in wiring instructions or recipient information
Use secure email: Ensure your email and the email of your real estate agent are secure

Rental Scams: Scammers post fake rental listings online, often at attractive prices. When prospective renters show interest, they are asked for personal information or to wire a deposit without having seen the property.

How to Avoid it:

Verify listings: Use reputable websites and check for duplicate listings with different contact information.
See the property: Never send money before visiting the property and meeting the landlord or property manager in person.
Beware of suspicious activity: Be cautious of landlords who are out of the country or can’t meet you in person.

Foreclosure Relief Scams: These scams target homeowners in distress, promising to negotiate with lenders to save their homes from foreclosure for an upfront fee. Once paid, the scammer disappears, providing no service.

How to Avoid it:

Verify credentials: make sure to verify the company through the Better Business Bureau and other online reviews.
Contact your lender: the best course of action is to work directly with your lender, as they are usually the only ones who can truly help work out a solution, such as lower payments or forbearance

Title Fraud: Scammers steal property by forging transfer documents and illegally transferring the title to themselves. They then sell or mortgage the property without the owner’s knowledge.

How to Avoid it:

Monitor title: Regularly check your property title for unauthorized changes.
Title insurance: Purchase title insurance to protect against potential fraud
Be cautious with personal information: Protect your personal information to prevent identity theft.

Protect Yourself

Along with the previously mentioned red flags to watch out for, there are some additional ways you can stay safe when it comes to real estate transactions:

Never wire money unverified: Always confirm wiring instructions directly with the title company or escrow agent in person or over a verified phone number.
Do Your Research: Independently research properties and never rely solely on information provided by sellers or agents.
Trust Your Gut: If something feels off, don’t hesitate to walk away. It’s always better to be safe than sorry.

Of course, one of the most important ways to protect yourself when it comes to a real estate deal is to work with one of our experienced attorneys. At Churchill, Quinn, Hamilton & Van Donselaar, we are here to protect your interests and help to ensure a successful transaction, from contract negotiations through the closing and beyond. Contact our office at 847-223-1500 to schedule a consultation or for additional information.