A 2018 FBI report revealed that approximately 11,300 people succumbed to real estate or rental fraud that year, resulting in losses of over $149 million. Although consumers are warier of scams nowadays, cons have become more sophisticated, leaving consumers unsure of handling them.
If you’re interested in luxury waterfront houses in the Boca Raton area, check out these common real estate rip-offs and learn how to protect yourself from becoming the next victim.
1. Title Fraud
Scammers employ identity theft to execute title fraud, whereby they pose as the homeowner, using falsified papers to have the property in their credentials. Consequently, they take a mortgage against the property, flee with the cash, and leave you, the homeowner, legally responsible for the mortgage settlements.
How to protect yourself: First, talk to your home insurance provider and request title insurance, as it offers the most resolute safeguard against such scams. Secondly, secure your credentials and desist from giving away your documents to entities you haven’t vetted.
2. Rental Listing Scams
Rental listing scams prey on unsuspecting buyers in the real estate market by replicating legitimate property listings and reposting them elsewhere. While posing as the landlord or agent listing the property, the fraudsters will ask you to release a down payment, as they finalize drawing up the contract.
How to protect yourself: First, do not wire money to anyone until you’ve met them in person. Second, make a point to verify whether the person with whom you’re dealing is a certified real estate agent. Third, you can play on the safe side by only considering listings from reputable agencies and websites.
3. The Out of Country Scam
Here, the prospective landlord claims to have left the country, making him incapable of showing you the house until you’ve signed the agreement. Often, the fraudster promises to mail you the keys as soon as you’ve paid the deposit.
How to protect yourself: Always insist on viewing a property in person before committing to any deal. And if the agent or landlord says that you cannot view the house because they are unavailable or overseas, happily walk away from the agreement.
4. Escrow Wire Fraud
This con usually begins with your fake real estate agent reaching out to tell you where to transfer your escrow funds in the pretense that their bank account details have changed. The fraudsters use spoofing tricks to set up fake websites, phone numbers and email addresses that may appear familiar at first glance. After sending the money, they withdraw it, leaving you with little to no chance of retrieving your cash.
How to protect yourself: First, be wary of any text or email asking to change money transfer instructions you already had. Second, never send money without confirming the wire directives face to face or from a number you’ve authenticated. Third, call your settlement agent immediately to confirm the transfer.
Whether you’re a homeowner listing your property or a consumer in the real estate market, you can easily fall prey to such predatory techniques. Luckily you can protect yourself by taking your time to double-check stuff and refusing to trust too easily.