There are so many things to consider when you’re selling a house. And things much more important than deciding on what kitchen tools to buy for your new place or what renovations to do to secure a good price! The last thing that you want is to be scammed, especially when you’re making such an important real estate transaction like selling a home. In fact, in 2018, the FBI reported losses exceeding $150 million due to property fraud.
A lot of people are overly embarrassed to file a complaint, making it even harder to catch a scammer and people making dodgy deals. Are you going to be the next to be scammed? After you finish reading this article, we’re confident you won’t be. There are always important repairs to make before selling a house and other things to think about, but for now, we’re going to take you through everything you need to know to avoid fraud while selling a house and to detect fraud managers.
Common Real Estate Scams
The Wire Fraud
This is how it goes down. You receive a phone call, email or text from someone who claims to be from an escrow company, on standby to wire your escrow funds. A lot of fraudsters will set up a fake website or something similar in order to appear like a legitimate company to work with. Scammers often use digital tools to make their phone numbers and websites appear familiar.
Once a victim follows all of their wire instructions, any withdrawn funds will be passed on to an offshore account and leave the scammer sailing into the ocean with your money. You will also have few options to retrieve it. The best thing to do is to protect yourself by looking back into the original documents that you receive from your lender. Do you really think that a reputable person is going to email or send you a text to receive money? Do you think that selling your house without a realtor over the phone is a good idea? A lot of people fall for this, but you won’t, now that you know how it goes down.
When predatory lenders persuade homeowners to refinance their mortgages on a repeated basis, this is the essence of loan flipping. The scammer will charge a high fee and various points with every transaction, and the homeowner will get completely stuck with increasing loan payments until they just can’t afford to repay. Often this can result in losing their home.
Most often, it is seniors who have memory impairments who are most vulnerable to scams like these. They do not realize that they are being taken advantage of at the time – all they can think about are things like realtor fees for selling a house or selling an unsellable house, and they lose perspective. A predatory lender convinces the homeowner that they can do something for them, helping them find better loan products or using cash-out refinance methods to pay for various renovations to improve accessibility.
If you’re an elderly homeowner or know other homeowners who have cognitive impairments, always discuss matters with a friend or relative. If a lender is actively trying to seek you out, even if you haven’t requested their help, this is a true warning sign. When you’re trying to sell your house, address only well-known banks and real estate agents.
Relief from Foreclosure
Those who have hard times often feel very desperate to save their homes. This is exactly when the scammer comes in. A lot of fraudulent managers can obtain access to public records, including homes in a pre-foreclosure period. These people then sweep in and offer some sort of relief which they can then capitalize on, leaving the homeowner in a terrible state.
When people are desperate and wondering about selling a house with a mortgage, the scammer can claim that they will try and help the homeowner by saving their home and offering to reduce all of their mortgage payments for a nominal fee. A lot of these fraudsters will even claim that they have affiliations with governmental bodies, including housing associations and programs. It’s a sad state of affairs, and many people can be left dwindled.
Many scammers like to post fake property for sale advertisements on social media sites or websites such as Craigslist. Scammers will then use these to lure in buyers (who may see that you have a for sale sign up on the property) and will ask them to make upfront payments to show them a property or have it held for them (like a deposit). They are only looking to get quick cash and will be on their way as soon as someone hands it to them. While neither the buyer nor the fake seller will have any legal claims to your property, it can still be a pain to deal with. This scam is rarer than the others listed and can be harder to spot. But you can help the buyer to avoid this issue by including more detailed contact info on For Sale signs and in real property listings. In the end, it’s up to buyers to be more diligent to protect themselves from this real estate scam.
Take Steps When Selling a House to Protect Yourself
We hope that this guide has really introduced you to some fraudulent activity. You should rely on your gut when something doesn’t feel good or seems nefarious. Only go for the most professional and reputable lenders and real estate agents to avoid fraud while selling a house. It’s also imperative that you ask for referrals from trusted friends and family members. Whenever you suspect that scammers may be trying to target you, end communication.
This article has been contributed by Elizabeth Barlettah.