The process of purchasing or selling your home is a stressful one. There are unforeseen fees, sleepless nights waiting to see if offers go through, dealing with the bank and lawyers all the while keeping your 9 to 5. Moving is no walk in the park, and unfortunately, there are people out there that take advantage of that. “Consumers are now more aware of scams, but because scams have gotten more sophisticated, consumers are not sure they know how to avoid them,” says Barbara Floyd Jones, program manager for NeighborWorks America, the nonprofit organization behind the Loan Modification Scam Alert campaign rolled out in 2009 at Congress’ direction.
Would you be able to identify real estate fraud if you came across it? Here’s a common, yet major warning sign you should be on the lookout for.
The Bait and Switch
So you’ve found a fantastic listing in a great location, it has impeccable amenities and the price is unbeatable, it’s too good to be true! No really, it is. Once you call about the listing, it will be JUST off of the market, maybe by mere minutes. The broker will have another place in mind for you, that’s nowhere near the other one, but if you’re not on the lookout for this type of fraud, you’ll most likely take the bait. You’ll be shopping around for a place you really don’t want in no time! Another component of this could be the broker inviting you to an open house instead, collecting application fees and vanishing.
Scams By The Numbers
The Federal Bureau of Investigation’s of Internet Crime Complaint Center revealed that in 2017 alone, 9,645 people reported real estate fraud which resulted in losses of more than $56.2 million. That’s just the amount of people who were not embarrassed to file these types of complaints!
“It’s a huge problem,” Melinda Opperman, executive vice president of community outreach and industry relations with Credit.org — a nonprofit credit counselling agency says. “A lot of the time, people don’t realize that even using public WiFi connections where they conduct personal business through email or websites opens them up to [these scams] because the communications are not secure.”
How to Avoid
To avoid this type of scam, do your research with the realtor who’s representing the listing and the amount of time the home has been on the market. If it’s an unbeatable deal, but it’s been on the market for five or six weeks, it’s plausibly fraudulent. Other signs include listings disappearing and reappearing on the market with the same images but different addresses, or have amenities that seem too good to be true but are not visible from photos. Working with reputable real estate businesses and sites is the way to go. The amount of money you may save is not worth the headache.