In general, one of the most important decisions and biggest investments in an individual’s life is buying real estate. For many people, owning a home is a major achievement because this will be where they will spend most of their time with their family.
However, purchasing real estate can also put you at risk for real estate scams if you are unsure what to look out for. Common real estate scams include foreclosure relief scams, wire fraud, loan flipping, home inspection scams, and many more.
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#1 Escrow Wire Fraud – Common Real Estate Scam
First, one of the most common real estate scams is escrow wire fraud. The scammers will call homeowners pretending they work for the escrow company or title company that is involved with the purchase of the home.
Then, they will provide specific instructions on where they want you to wire the escrow funds. However, the scammers will make a fake website that will look similar to the title or escrow company that you are working with, and many people fall victim and send the money as instructed.
By the time the new homeowner realizes they have been scammed, the money has already been withdrawn. You can keep yourself safe by always confirming the wire instructions with a live person from the phone number that they have given you. You should also confirm the escrow account number before you wire any money.
#2 Loan Flipping Scam – Refinancing Real Estate Scam
Next, a loan-flipping scam happens when a fraudulent lender convinces homeowners to refinance their mortgage several times. The scammer will charge very high fees for each transaction, and the homeowners will end up with a higher monthly loan payment than they had before, and sometimes they can’t even afford the payment.
Unfortunately, seniors and older homeowners that have memory issues are often targeted because they have a large amount of home equity and poor judgment due to age-related issues.
In general, if you have recently had your mortgage refinanced, then you shouldn’t do another one so soon. If any lenders are actively calling you, that is a red flag.
Also, you should only work with lenders that are banks that are well known. Make sure you ask any questions you have as well.
#3 Bait and Switch Movers – Moving Real Estate Scam
Lastly, another common real estate scam is based on moving your property to your new home. The Bait and Switch Mover scam will happen when you fill out a form to request a moving company for an estimate for moving your personal belongings to the home you just purchased as you are looking for an estimate.
The moving company arrives, and they tell you it is going to cost you more money than the original quote. They often will pack your belongings first, then tell you the amount is higher than what was quoted. You should only work with a reputable moving company.
Make sure you ask them for their license number, then check the BBB so you can see if there are any issues with the moving company.
This article was published to help people learn more about real estate scams, and how you can avoid being scammed. If you have been scammed, make sure you notify the authorities and file all police reports.
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