The Big List of Real Estate Scams, Scams and Fraudulent Tactics - Kris Lindahl Realtor (2023)

Buying, selling and owning real estate, including homes, are often the most expensive transactions many individuals and households undertake in their lifetime. Hundreds of thousands of dollars can be at stake, which attracts dishonest scammers and scammers who may want to take advantage of those involved.

Why are even the hardest working and smartest people vulnerable to real estate scams? It's human nature to want the best out of every transaction, so we tend to trust those we do business with. There are other reasons why real estate fraud is successful. One of them is this oneReal estate has its own language,It automatically puts many buyers, sellers, or homeowners at a disadvantage when someone tries to mislead them. When a person does not fully understand terms such as foreclosure, reverse mortgage, guarantee, emergency, and others, it can lead to confusion and even willful exploitation.

The potential for fraud is increased by the fact that most people will engage in real estate transactions relatively infrequently over the course of their lives. This leaves them inexperienced and vulnerable to those who seek to exploit them.

Anyone involved in a real estate transaction can better protect themselves by raising their awareness of the various scams. They should trust their instincts and remember that if something seems too good to be true, it probably is. Another key to avoiding fraud is to only hire reputable professionals to assist in the process.

Whether you're a buyer, seller, owner, or renter, knowing how to pull off common real estate scams, how to separate fact from fiction, and what to do if you get caught up in a scam like this can help you earn your hard-earned protect money. It's also important to understand that situations like this aren't the norm - a certain level of skepticism is often helpful, but having fear, to the point of avoiding any type of transaction, can in itself be harmful.

real estate and home buyers

It is natural for a home buyer to look for the best deal at every step of the process. This can lead to fraud related to mortgages and bad loans, wire transfers, real estate and deed fraud, home inspection fraud, and more. "Buyer beware" can never be more important than when buying a property.

Bank Transfer Fraud

One scam to keep an eye on right now is the increasing and extremely costly real estate scam, namely the real estate transfer scam.This is a scam area that cheats buyers out of tens of thousands of dollars in down payment funds. This scam is dangerously effective for several reasons. The scam appears to be perfectly legal as it uses email technology to scam shoppers out of significant amounts of money.

Electronic funds transfer begins with the scammer accessing the information of a seller involved in closing a property. The seller could be the homebuyer's title company, lender, or real estate agent. However, the scammer does not even have to gain access to their computers, they can only demand some knowledge from the employees working there. such as their names, titles and email addresses.

Once the scammer has figured out who is involved in an upcoming deal, they email the homebuyer with instructions on how to transfer the down payment. This email will actually appear to come from either the buyer's escrow, title company, lender, or even the buyer's real estate agent to the homebuyer. This fake email uses a method called email spoofing.Email spoofing is the falsification of an email header to make it appear that the message came from a different person or location than the actual source. And because the email appears to be from a legitimate source, homebuyers often follow the scammer's instructions and then use the scammer's instructions to send the money. Unfortunately, when those involved realize what happened, both the scammer and the money are gone.

Although this scam can be difficult to spot, there are a few signs to look out for.For example, emails that are sent outside normal business hours or contain bad grammatical or spelling mistakes. If the payment method is switched to bank transfer at the last minute, warning signs should be put up. Check that the email address is the email address you are working with (e.g[email protected]vs[email protected]) in the past or during the home buying process.

In addition, the parties involved can take measures to better ensure the trustworthiness of the communication. Encrypted email, verified phone numbers, instruction confirmation and morePasswords or PIN codesCan be used. Buyers should be very careful in a real estate transaction to validate the transfer of funds and question what appears to be a genuine source of news.

An easy way to check the wiring instructions is:Call the escrow or ownership company directly to confirm wiring instructions.Be sure to speak to someone who can repeat and confirm the instructions and some details of the transaction. This allows you to confirm that you are speaking to a legitimate person involved in the transaction. But be sure and call a legitimate phone number. Scammers often provide phone numbers in the fake emails, which when called are forwarded to the scammers, who can then pose as the employees listed in the email.

Predatory real estate loans

Predatory real estate loans are loans that impose unfair or even inappropriate loan terms on the borrower.Predatory lending often uses fraudulent practices to trick a borrower into taking out a loan that the borrower may not need or want. In some cases, bad loans are coercive and unscrupulous practices that attempt to trick a borrower into taking out a loan they may not be able to afford. The common characteristics of predatory loans are often high interest rates, excessive fees and other charges, and rigid terms. The challenge is that bad debts are not always illegal.

A consumer's abilityGet a mortgage at reasonable market rateswill depend on several factors. This includes the borrower's creditworthiness, income and employment history, down payment amount, loan-to-value ratio and more. For borrowers with bad credit or without a significant down payment, “emergency loans” can be the cheapest route to home ownership. Sometimes referred to as direct loans, these loans can have a place in legal lending if the interest rates and terms are affordable and the borrower is fully aware of the terms.

There are certain specifics to consider when it comes to robbed real estate and mortgages. First, Alender can guarantee everyone's approval. Borrowers are often in a hurry to sign loan papers, as real estate transactions often come down to timing and action. You will have some robbery creditslife insuranceor other coverage included in the loan. The loan may include repayments or other unreasonable contractual penalties.

However, the biggest factor in bad debts in most cases is the very high interest rates and loan fees. This can make payments very high, making it difficult, if not impossible, to keep payments up to date. And in most cases, loans are attached to the property in the form of a lien, allowing the lender to take ownership of the property in the event of a default on the loan. Being a victim of a robbery loan can leave the borrower heavily indebted, their credit score compromised, and they may be left with nothing to show for it.

Home inspection fraud

Home inspections are valuableWe help home buyers identify hidden or unseen problems in a home. However, they are of little value if the home inspector is unqualified, does not conduct a thorough inspection, or is just aiming for a quick buck.Like most scams, home inspection scams are based on a lack of integrity. However, homebuyers can arm themselves with enough knowledge to reduce the risk of being cheated.

For example, a homebuyer may only allow a cursory visual inspection if they expect a full and detailed inspection to be carried out. Therefore, before hiring an inspector, it is important to inquire about an inspector's experience and background. Oftentimes, real estate agents can recommend one or more home inspectors. While most recommended appraisers are likely to turn out to be good or excellent appraisers, homebuyers should do their own research and be comfortable with their own decision. Special controls should be carried out with even greater care. Let's say you're looking for oneLakefront home for sale in Minnesotaa pier is attached to the main structure. You need to find a qualified appraiser who can give an honest opinion on this type of home extension.

Another home inspection scam involves hidden or additional fees. A home inspector may set a low price at first, but in the end the buyer can quickly end up paying double the original offer.

For safety reasons, choose a home inspector with experience and a good reputation.Make sure they understand that a full, detailed written inspection is required and ask if they can guarantee their results. You also have to carryError and Omission Insurancein case they miss something in an inspection report that ends up costing the buyer money. Many states require home inspectors to be certified and licensed in the states in which they operate. In these states, make sure the inspector is properly licensed by checking the state's website or contacting the state agency that regulates home inspectors.

Mortgage back

Instincts, research, and knowledge can help potential homebuyers avoid becoming a victim of mortgage fraud, but even diligent consumers can become victims. Home loans can be complex and difficult to understand, and that complexity can be confusing.Many mortgage-related scams have been around for years, but they have evolved as consumers have become more informed and as home buying technology has advanced.

A more common mortgage scam is a version of the old "bait and barter" deal. A homebuyer may be attracted to a lender who promises a loan approval guarantee, low interest rates, or no closing costs. Once you apply for and then complete the loan, the homebuyer may find that their interest rates have gone up or that they are not eligible for certain benefits. This is a scam as the lender advertises these extremely low interest rates and no closing costs, knowing full well that only a few very qualified borrowers can take advantage of it. Most borrowers will not do this.

Some unscrupulous lenders offer an attractive interest rate, but there may be a large, non-refundable upfront fee or down payment on the loan. If the lender changes the interest rate during the loan process, the borrower may be forced to accept the higher interest rate or lose their deposit.

Another form of mortgage fraud is overstating the value of a home in order to increase the funds available to the homeowner. While this sounds tempting, it can plunge a buyer into unmanageable unnecessary debt. If the property's value also falls, borrowers can quickly "flood" or "flip" their loans because they owe more than the property is actually worth.

Buyers can help avoid mortgage fraud by better understanding the mortgage process and only working with reputable lenders.There are mortgage loan products designed to help low-skilled people finance a home. However, as with any home loan, borrowers should be aware of the fees, interest rates, and terms of such loans.

Happy with his deathFraud Enforcement and Recovery Act af 2009 (FERA), mortgages and mortgage fraud have drastically decreased since the law was passed. However, as with all consumer protection laws, scammers will find a way around the rules. Therefore, home borrowers should always be careful with their loans, ask questions and read the materials and loan documents before signing.

real estate agency or scam

Real estate fraud or property fraud is a slow scam that is a form of identity theft. This can leave a property owner in the position of not actually owning a property that they may have thought they owned for years.

To understand title and title fraud, it is helpful to know that every state requires written proof of ownership, usually in the form of a deed.A deed contains a number of details including the type of deed, the owner, the buyer and the owner's willingness to transfer the property. It also contains a detailed description of the property and the signature of the donor (seller), which is usually notarized. Deeds are usually transcribed by hand, but many states now allow electronic recording so the buyer can be assured that the deed has been transcribed. Notarization of the deed, usually in the county where the property is located, also verifies the chain of ownership.

Transactions can be subject to fraud or counterfeiting in a number of ways. It can be signed by someone pretending to be the donor (seller) and notarized by a fraudulent notary or someone who misidentified the signer. Or you could even act as a representative of the founder. Scammers have been known to gain access to deeds by providing false information or stealing a deed.

The problem of property and deed fraud is compounded by the need for public records and the potential for identity theft associated with those records. Vacant and unused properties tend to be at the highest risk. Victims include the original owner and innocent third-party buyers. This is why district clerks, notaries and diligent landlords play such an important role in real estate transfers.For this reason, title research and title insurance – which confirms the validity of a deed – are essential to any real estate transaction.

Home buyer protection: what to do?

What can a homebuyer do to protect their interests and minimize the risk of fraud or misrepresentation in a real estate transaction? You can start by knowing the types of scams that target homebuyers. Surround yourself with trusted, experienced professionals who execute winning trades every day. These people may include real estate agents, mortgage lenders, or otherscloggedor title business. These people should be able to ensure their services and support them in the event of errors and omissions. Be wary of unsolicited offers of "help" and mortgages from strangers or people you've just met.

Also, remember that not everyone who applies for a home loan is entitled to the best interest rates and loan terms. Many homebuyers with poor credit ratings may need to find lenders in the secondary market, where interest rates can be higher and terms less favorable. However, these legitimate lender services and mortgages do not require any fraud or lending business. Loan terms often reflect only the creditworthiness and creditworthiness of the borrower.

Fraud and forgery are criminal activities that should always be reported.For those who have actually been scammed, there is usually some form of recourse. However, the most common exception is with bank transfers. Be extremely careful in this area. A combination of knowledge, care and diligence can go a long way in protecting buyers throughout their real estate experience.

Real estate and home sellers

Sellers can face a number of challengesSale of houses or real estate. It's not just individual buyers looking for a good deal, there are also professional buyers looking to take advantage of desperate or uninformed sellers. There are fake real estate agents and fake loan officers to beware of. While some of these tactics are not necessarily illegal, sellers should be aware of the challenges they can face when selling a home.

Fake real estate agent

Sellers can be scammed by people posing as real estate agents who may not be who they appear to be.They may not even be licensed real estate agents. Even legitimate, licensed real estate agents may still exaggerate their experience, skill, and sales history.

Any seller contacting an agent or attempting to use a professional service should first verify that an agent is licensed in the state where the property is located. This can be done very easily by accessing the government website that is in charge of real estate licensing. Potential home sellers can also check a broker's years of experience and qualifications with the broker's agent. Claims about an agent's sales skills and experience can also be verified by many online sites such as Google, Yelp, Angies List or BBB. There are also real estate websites where previous clients of the agent leave testimonials or comments about the agent and their service.

Fake bank representatives can also pose as house or real estate sellers. A scammer posing as a mortgage or loan officer can convince a seller that they have a buyer for the property. They can then request and receive the seller's personal information - such as the seller's bank details - in order to "wire" them the proceeds from the bogus buyer. They can then use the seller's bank details to empty their bank account.

If a real estate agent or loan officer is not open about their background or experience and is unwilling or unable to verify the license, it's probably time to move on.

“Alternative” real estate buyers

Many sellers have seen ads, or may have received postcards, promising to buy their home for cash in a few days.While some may be legitimate, others are not. Many do not intend to buy a home on their own. Instead, they take your information and then sell your personal information to those who are actually willing to pay cash. By contacting these “middlemen,” you are not only giving away your personal information to others that you may not wish to share, you are also giving away information about your home.

Some of these individuals or companies may promise a quick cash sale but ask the sellers to sign an option or foreclosure agreement.This gives them the exclusive right to sell the property. You may think that this arrangement facilitates a quick transaction, but instead it prevents you from selling the house yourself. In some cases, this can be a legitimate business practice, as companies are also trying to protect themselves and receive compensation for the time and effort they put into selling their products. But sometimes a sale can take months or more to close, and during that time you are committed to it. In some cases, some "buyers" charge a fee to complete the sale. Note that in many states, anyone selling real estate must have a state license.

Sometimes the offers are reduced significantly as the expiry date approaches. Sellers may feel obligated or have no choice but to complete the transaction. These are scam tactics that sellers can get away with.

That's not to say there aren't reputable companies willing to buy your property right away - there are. They typically buy a property and then sell it at a profit, but this lower purchase price option could be the ideal situation for some sellers looking to sell extremely quickly.As a seller, you should make sure that it is not just a resale of your data, but real buyers. Fake buyers cut into your profits and can significantly delay sales. In this case it says "Beware of the seller".

There is now, and more are on the way,Companies that offer you to buy your home for cash - without hiring a real estate agent or "putting" the home on the market.Many of these companies have received large amounts of venture capital funding to buy and then sell the homes. Most have detailed websites that explain the ins and outs of their specific home buying process. In addition to these venture capital backed companies, many large national brokerage firms now offer the service of buying homes direct from the seller without having to list them for sale to the public.

Home sellers should consider all options when selling their home or property, including hiring a traditional real estate agent.Home sellers should request a “net proceeds” calculation from both the traditional agent and the companies offering to purchase the home. Calculating the estimated net proceeds gives the seller the approximate amount they will receive after the sale.Net Proceeds from a sale is defined as the net amount of cash received after ALL commissions, fees, repair costs, loans, mortgage and closing costs have been deducted from the sale price. This net amount can then be used to decide which company or agent will bring the seller the most money once the sale is complete. Sometimes the commissions can be higher than sellers would expect, making the purchase option less lucrative than they think.

cash for housing

"I'll buy your house for cash" is closely related to fake buyer scams and can be legitimate, misleading and fraudulent.You may have seen the signs on telephone poles or on street corners. "We Buy Ugly Houses" and "We Pay Cash for Houses" are variations on the same theme. They may send targeted emails like "We'll buy yours."Sartell house for salefor cash". Marketing campaigns can be stark, but for those who don't have the money to fix a home, are behind on payments or taxes, or may be in the process of getting a divorce, the message can be enticing. A quick buck and a meaningless one Sale.

If you call the number on the sign, you will likely be asked to make an appointment to have your home inspected. One of the first questions you will be asked is whether you own the home entirely or what the balance of the mortgage is. This allows the cash buyer to quickly calculate how much money the seller could get away with and lure the distressed seller with promises of cash after the deal is done. Because the goal of these buyers is to purchase the home for as little as possible, sometimes 50-60% of its true value, sellers often receive far less than if they had put it up for sale through a real estate agent. Although sellers can get their money much faster this way, the equity that was in the house is gone forever.

Home sellers considering buying a home with cash are best off choosing a company with an office, a website, and a successful track record of buying a home with cash. Avoid people who don't care about their reputation and move from date to date. Make sure you know exactly how much your final, concrete cash offer compares to the actual value of your home.For those facing divorce, bankruptcy, or other time-sensitive issues, a cash-paying company may not be a perfect option, but it could be a viable option. Just think about the long-term costs and the price you actually pay for the convenience.

Unsolicited offers to buy

Even those who have no intention of selling their home can be exposed to unsolicited home-buying real estate scams.In most cases, these offers take the form of a short notice or postcard explaining that the buyer is interested in a property and can pay cash quickly. This usually includes the willingness to pay a “reasonable price”. However, what is fair to them may not be fair to the seller.

Homeowners who receive these communications often fall into one of two categories. They live in a desirable neighborhood or community where homes are in demand, or they may be in arrears on property taxes, facing bankruptcy or divorce, or have failed to sell a home through a real estate agent.

Basically, many of these buyers are looking for an owner who doesn't understand the true value of their home, or an owner who wants to sell it quickly and at (almost) any price. These buyers are hoping to find someone who is about to offer a home but doesn't want to go through the hassle. You may find yourself in a personal situation that is forcing you to consider selling a home. These buyers often hope to find sellers willing to sell for 70% or less of a home's market value.Keep in mind that this is often perfectly legitimate - the goal is simply to figure out what you can sacrifice for convenience.

Even unsolicited buyers can be tied to the house. These pinball players are willing to buy the house for a bargain price and then pour money into improvements and repairs with a plan to resell the house for a profit. Or they can pay cash now, auction the house the traditional way, and take the difference. Before selling through an unsolicited offer to buy, a seller must know the true value of a property.Most of the time, sellers sell better through an agent, but -- similar to "cash for homes" -- the time and effort involved can make it a desirable proposition.However, if you don't mind the wait and want to get the full value for your home, it's usually worth exploring all the options.

Seminars on fake real estate investments

Real estate seminars appear to be happening weekly across the country. They use radio, television and internet advertising to bring people togetherPromises of quick wealth by buying and selling real estate.They discuss that your current real estate market is "perfect" for selling real estate, whether it's a sellers' or buyers' market. Also, they always have a few spots available. They often entice participants with a sales pitch about how easy it is for someone to make a lot of money with their system with little investment and little time.

While real estate seminars represent potential riches for attendees, they are often designed to make money for those who hold them. They do this by selling their own tapes, videos, books, additional online or classroom training, and more. These tutorials can start by showing participants how to get great credit cards and cash lines of credit. In this way, participants can remove the cost barrier to purchasing their future real estate investments, and also have money for any "educational" programs that are soon to follow. The bottom line is that much of what these "systems" teach can be found online, in a book, or through a local agent.

Attendees of such seminars should test the validity of all basic principles before purchasing additional material. The aim of the seminars is to reach the participants emotionally, to convey to them how special their participation is and to encourage them to take the next step.

There are many ways to invest in real estate and there are people who enjoy educating people about these methods.Not all real estate seminars are potential scammers. Just watch out for people who promise they can show others how to get rich quick.Check the credibility of the speaker and their potential real estate investment method by looking for online reviews or testimonials. Ask local real estate agents, current real estate investors, or those in the mortgage or banking industry for their opinions on the seminar and speaker.

Animated Cheat

Moving is often difficult, which is why hiring a moving company can be so appealing. Especially if you drive your car across the countryHome in Rochester. However,If the mover is not careful, hiring a mover can lead to even greater inconvenience and financial loss.

Problems, including potential fraud and misunderstandings, often arise without government action. This is because moving costs are often calculated roughly and can be expensive. After a move, a mover can often find that they underestimated the amount of furniture and boxes and underpaid. Unfortunately, in some cases and depending on the contract (if any), they can hold your furniture and personal belongings hostage until the higher amount is paid.

This additional hassle of paying can be avoided by making sure any mover you hire is registered and insured and by checking online reviews. It can be a serious mistake to base your choice of provider on price alone. Another way to avoid the problem is to stay in control of the assets. You can achieve this by hiring and driving the moving truck yourself, paying only for the labor at both ends of the move to pack and unpack your items.

Before a long-distance move, familiarize yourself with the professional moving process. Find out about the costs and common elements of a deal. Read each agreement fully and understand its terms before signing it.Taking a little more time up front and being more careful can avoid serious headaches later.

Home seller protection: what to do?

Sellers can improve the chances of a successful real estate experience by surrounding themselves with trusted, experienced professionals and verifying proper licenses, references, and claims of success. Know who the buyer really is and understand that there are unscrupulous people out there looking to turn your hard-earned equity into profit.

That's not to say unsolicited buyers or cash have no value. They can play a role in certain situations and real estate seminars can improve understanding of the real estate process. Experienced sellers simply need to understand why and how these real estate programs work.

Today's homeowners

While homeowners aren't the primary target of scams, there are a few they should be aware of. Homeownership is an ongoing process that requires ongoing maintenance of the home to maintain and increase its value. This includes ongoing mortgage payments, tax payments, repairs, and modernizations. With today's tighter credit standards and higher down payments, most homeowners already have equity at the time of acquisition. This puts today's homeowners at risk of real estate fraud in many ways.

Credit modification or foreclosure assistance

Homeowners who are struggling to keep up with their mortgage payments or who may default on their mortgage face a myriad of loan modifications and foreclosures.Not only could this result in the loss of the home, but it could also potentially result in the homeowner remaining financially responsible for the mortgage after they vacate the home.

Because the mortgage, refinancing, and foreclosure process can be so complex, the average homeowner typically seeks help and guidance in tackling these issues. However, they may be offered help that is fraudulent or not in their best interest. Homeowners need to be wary of shady foreclosure advisors, expensive loan reverse programs, fake credit scores, decoy tactics, and even fraudulent "government" loan modification programs.

Some of the scams targeting today's homeowners include foreclosure "consultants" or loan examiners who may offer to review loan records and offer down payment advice. In other cases, financially troubled homeowners can be persuaded by scammers to transfer ownership of their home to a leaseback company and pay rent to that company - to get out of a mortgage. However, once the transaction is complete, the rent can often be more expensive than the original mortgage. And instead of helping a homeowner stay in the same property, they often lose the home and then can no longer afford the rent on the home they previously owned.

Common loan modification scams are all about “helping” homeowners through the complicated loan modification process. Scammers can be patient and wait for several meetings before asking homeowners for a significant processing fee. Instead of getting the help they need, the scammers offer no real help or support and the charges are lost. These scammers may even use deceptive websites that look official and use legal-sounding language.

Down payment on a loan modification is a sign that today's homeowners should be inquiring and cautious. Anyone seeking a loan modification should contact their lender, a government agency like HUD, or a real estate attorney. Many legitimate loan modification programs either do not require down payments, or if there are fees, they can often be carried over to the new, modified loan.

Heimwerkerback

Many homeowners can fall victim to home improvement scams during the routine renovation of their home.While it is expected and even helpful for home or building repair companies to suggest alternative or additional services. If these services or improvements are not in the best interests of the homeowner, it can be considered unscrupulous.

Homeowners should never be required to pay the full amount for a renovation project, much less "cash only." An established contractor should be able to complete a project by accepting a "good faith" down payment, typically either half or even less than half of the estimated project cost. Final payment is not required until the project is complete to the homeowner's satisfaction.

Home improvement scams often involve unnecessary extra work that the homeowner doesn't ask for. This can also include fraud by contractors who discover additional "issues" while working on a project. Keep in mind that unfortunately some problems with a home project can't be identified until the work has already begun. That is why it is important to check the contractors beforehand. The exam may include online assessments, checking with the local Better Business Bureau, and verifying licensing and insurance information. In the case of larger projects in particular, it is perfectly acceptable to ask for references. Inquire in advance about any guarantees for the work done.

Most home improvement and contractors grow their business through repeat customers and customer satisfaction. They work hard to maintain their good reputation.Anyone who is dissatisfied with a contractor's work should not immediately assume that they are being scammed. Instead, they should try to work out any issues with the contractor before assuming a scam.

Unsolicited offers for repairs or improvements

Some do-it-yourselfers go door-to-door claiming they've just completed a job at a nearby property. They may say they either have extra time or extra materials. This results in a seemingly cheap price for the homeowner.but only for today. The problem is that the work or materials are often substandard and it can be difficult or impossible to get back in touch with these contractors.

Many of these scams involve compaction, pruning, gutter cleaning, or roofing. In the case of roofs, scammers take to the streets immediately after a storm, convincing homeowners that their insurance company can fix it for free. Recently, solar panels have joined the list of home improvement jobs that may require inferior labor and materials.

There are almost as many ways homeowners can protect themselves from substandard renovations as there are scams. Homeowners should never use freelancers who are “in the neighborhood.” Contractors must always be licensed and insured. Ask friends or family for recommendations, or read reviews online. Obtain cost estimates and guarantees in writing. Never pay for repairs in full upfront, and if possible, pay by credit card so you can claim recourse if the work is defective. If a homeowner ever gets a “today only” offer or from someone who needs a 100% cash down payment, you should look elsewhere. It's just not worth the risk of a scam.

Home Protection: What to do?

The vast majority of homeowner fraud can be prevented with due diligence and proper business dealings. When it comes to loan modifications, the current lender has a vested interest and may be able to help homeowners directly, or at least suggest where to find help. Be wary of advisors who ask for upfront payment.

When it comes to home improvement, only licensed and insured companies with a good reputation should be hired. Never pay for repairs 100% upfront, let alone cash. If you want to get the best price on a project, you should get bids from multiple contractors, but make sure each one is licensed and committed. Essentially, you are not dealing with temporary workers whose sole interest may be getting paid. Use your common sense and trust your gut feeling.

tenants and owners

Even renters are not immune to real estate fraud. In many cases, they are more vulnerable to fraud, deception, and outright theft. Tight deadlines and coveted properties that seem too good to be true can contribute to the problem. Scams can include false advertising, over-the-top amenities, and even the relocation process. Rental property owners should also take steps to protect themselves from real estate fraud. Regardless of whether you are a potential renter or landlord, there are areas where you need to be careful.

Fake Rentals and Craigslist Ads

Prospective renters are more susceptible to fraud by responding to fake ads for properties that either don't exist, aren't available, or are posted by people who don't actually own the property. This scam can easily happen to holiday rentals, rentals secured by moving from one city to another, or even well appointed properties in desirable areas.Prospective renters may feel pressured to rent such a spectacular property and may be more than willing to pay the scammer an application fee, a security deposit and the first month's rent.And since the scammer doesn't actually own the rental property, the prospective renter ends up with a worthless lease and wasted money.

How can a prospective tenant protect themselves? If possible, a rental property should be personally inspected inside and out. Be wary of a property owner or manager making seemingly excuses as to why a property cannot be viewed prior to signing a lease. They may indicate that they are out of town, or the current tenant may refuse to show the property. These are textbook warning signs.

Renters can avoid this scam by working with well-established, highly rated property management companies, who typically offer a larger selection of properties and have a good reputation that needs to be protected. Request references from individual owners and verify that the owner's name matches the name in the county home search. You should only rent from trusted websites that can offer renter protection. You can also collect information by searching the rental address on the internet.

Remember that transferring money is basically the same as sending cash. When it's gone, it's gone. And if the rent is too good to be true, then it probably is.

This scam can also harm property owners. Some scammers may instruct the renter to change the property's locks and move out due to an unforeseen problem (e.g. being stuck abroad). If this happens, both the tenant and the landlord face significant problems. Landlords and property management companies may wish to tag all photos online with their phone number/company name to reduce the likelihood of someone taking the photo and creating their own "listing".

Comforts lies and exaggerations

While it's not uncommon for a landlord to flatter a rental property in an advertisement, there's a difference between pretense and outright lies. Outright lies about a property's amenities are another scam that renters can fall victim to. This is an issue that may not be discovered until it is too late if a property is not inspected in person.

Amenities that are often overpriced or simply not included (even if advertised) when renting the property include furniture, utilities, club memberships, parking privileges, or gym or club space. However, if the rental property is in high demand and the rent is affordable, a renter might be willing to let the scam go. They may accept the owner's apology for forgetting about the property's amenities or mistaking it for another unit.

However, if a tenant feels cheated, or if convenience was a factor in the rental decision, they can request the landlord to remedy the situation in the form of a rent reduction or renegotiation of the lease. If the landlord is not opposed to such a solution, the tenant can contact the Federal Trade Commission, an attorney, or a local tenant rights agency.

Tips for landlords

Mostrental property ownerscan tell stories of nightmare renters who either refused to pay the rent, abused the property, or simply tricked the landlord into renting the property. Many of these situations are attributed to "bad tenants," but in some cases tenants are simply deliberately deceiving a landlord.

What can you gain by cheating a landlord? You can get free rent for a month or more. You can sublet the property without permission or knowledge of the owner. They may not be honest about the number of people who will be staying in the rental property, or they may even be using the property for illegal purposes.

While steps like credit checks, employer checks, references, and background checks can reveal a lot of information, there are other steps a landlord should take to avoid fraud. Locks should be replaced immediately when a property becomes vacant. An online search may be conducted, including a search of police files. Personal inspections of the property and discussions with neighbors can give an insight into what is happening on the property. If the rent is not paid according to the terms of the lease or the tenant is disruptive, the main thing to do is to take immediate and quick action to solve the problem.

Rental property owners would do well to focus on tenant quality rather than just filling vacancies quickly. This can save time, frustration and financial loss in the long run.

Many states, counties, and cities have different laws protecting renters' rights. Some of these laws and regulations can be very much in favor of the renter. For example, some parties may prohibit rental decisions based on the prospective renter's criminal record. Landlords should familiarize themselves with such laws and regulations before and during a tenant's tenancy.

Protecting tenants and landlords: what needs to be done?

There are arguably fewer safeguards for landlords and renters than for homebuyers and sellers, making those involved a slightly easier target for scammers. The more temporary nature of rent also makes it more accessible. If possible, renters should never let a property without having personally inspected it. Never pay cash or transfer money. Ownership of the rental property must be proven.

Landlords can best protect themselves with thorough background checks and careful post-rental follow-up. Act quickly when a tenant fails to meet the terms of a lease.

Scammers tend to take advantage of human nature. They understand the value of desirable real estate and desirable amenities. They create a sense of urgency in a transaction that can be expensive for a tenant.

Seniors

Seniors are a big target for real estate scams as they tend to own their homes longer and may not be familiar with how scammers use newer technology to do their trick.Senior real estate fraud should not only affect seniors, but their families as well. Here are some on the riseCommon scams involving seniorsand real estate.

Reverse Mortgage Fraud

reverse home loanis a financial tool designed for seniors to help them achieve a better quality of life in their later years.Seniors can obtain equity from their home while still residing in the property. While the product and its proper execution can have real value, it can also be used by scammers to steal a senior's equity.

A senior may receive an unsolicited offerLearn more about reverse mortgages, often through a formal postcard or letter.The note touts the benefits of reverse mortgages and how a senior can "get paid" to live in their own home. Instead, the senior could be stripped of his equity by the scammer and given a conventional mortgage that he cannot afford.

Other reverse mortgage scams involve selling a product or service to seniors while funding the purchase through a reverse mortgage. The senior loses their equity and ends up getting a product or service of much lesser value.

Reverse mortgage fraud can be avoided by not responding to unsolicited offers. Never sign documents you do not understand and never seek outside advice. In many cases, cheated seniors do not report this because they may be embarrassed. Any fraud should be reported to the authorities.

The FHA maintains a list of legitimate lenders that offer reverse mortgages. A prospective homeowner should check their lender with HUD or FHA. It's best to work with a lender who has experience with this type of loan. Protecting against fraud and potential fraud includes a federal law that prohibits anyone from requiring someone to purchase a financial product (such as life insurance, long-term care insurance, or an annuity) in order to obtain a reverse mortgage.

Predatory Agents and Contractors

Predatory agents and contractors prey on the elderly for a variety of reasons. These scams can be related to Medicare, prescriptions, investments, funeral planning, mortgages, home improvement, and more. They can be booked online, by telephone, by e-mail or in person.

Many of these scams involved substandard or incomplete services. Seniors can protect themselves without being pressured into making a decision.Any product or service of real value stands up to scrutiny and a second opinion.Products or services should never be paid for in cash or by transferring funds to an unknown location. Documents should only be signed if they are fully understood. All contractors must be licensed and insured. Seniors don't necessarily have to be suspicious of everyone they come in contact with, but healthy skepticism can be helpful when speaking to someone who wants to sell a product or service.

Elderly protection: what can you do?

It is unfortunate that scammers take advantage of the good nature of many older people.The best way for seniors to protect themselves is to be very cautious and skeptical about any mortgage-related offer or service.Do not take out a reverse mortgage without consulting a trusted family member or attorney. Seniors should be aware that some practices may even involve family members who have their own interests in mind.

Seniors need to know that while there are many products and services they can trust, there are also ones that are tailored for them. Be especially suspicious of unwanted products or services. This could be a first indication of targeting. Even when they start using services, seniors may be oversold or receive inferior or non-existent services.

If a senior feels pressured or even a little confused when asked to purchase a product or service, they should back off. Take the time you need to review any documents and don't be afraid to get a second opinion. Seniors should trust their instincts and lifetime experience, and if they're feeling strange about a transaction, it's better to walk away than get caught.

Stay up to date and informed

A lot of money changes hands in real estate transactions. Because there is so much money, it attracts a multitude of scammers, scammers and predators. For many of these unscrupulous individuals, it is so financially rewarding to deceive others that they are willing to invest significant time and effort to correct their deception. Others know that the urgency and "fear of missing out" can leave their victims in dire financial straits.

The more money at stake, the bigger a real estate scam can be. When it comes to real estate, the principle of “beware buyers” applies to sellers, homeowners and renters alike.

Anyone involved in a real estate transaction must exercise due diligence to ensure the money is routed to the right people at the right time through secure payment channels. While the internet has added another layer to real estate fraud, the principles of self-protection remain the same. Work with trusted professionals. Find out what's insideevery document you sign. Never pay with cash or bank deposits, and perhaps most importantly, trust your gut. If something seems too good to be true, or if a person or transaction jumps on your radar, at least come back.

Keep in mind that the vast majority of real estate transactions go off without a hitch.There are reputable professionals and established companies with good reputations worth supporting. Knowledge and caution can be of great benefit to those involved in real estate transactions. However, fear of fraud should not stop anyone from achieving their goals. You've learned a lot about real estate fraud. NowLearn about other types of scamsand get tips on how to win.