Listen here to my podcast about this topic.
The main real estate scams I’m familiar with are:
- Ponzi scams: Ponzi is basically collecting money in a promise for higher rates of returns than normal. Usually, agents, brokers, developers, or others perceived to be a land developer/owner of real property in exchange for your investment, they will return a huge return on your money. The money they collect from each one after you, pays your return until they run out of people to scam, then the Ponzi scheme collapses. But not after some of them collect millions from unsuspecting (albeit greedy and gullible) investors. Phoenix Man Admits Securities Fraud With Real Estate Investment
- email closing funds scam: Pretending or spoofing legitimate email address to be from the closing attorney, lender, or other real estate agent which tells you to send the down payment/closing funds for your residential real estate closing to a different bank account (could be both domestic and international crime). Another example: Homebuyers lose life savings during wire fraud transaction, sue Wells Fargo, realtor & title company
- real estate agent review scam: Fake negative reviews are posted about real estate agents, then the scammer contacts the agent and asks for thousands of dollars to remove negative review…
- filing fraudulent deeds: some criminals either (a) forge a quit claim deed to a home making them owner, or (b) coerce a homeowner into signing the quit claim deed to transfer ownership and then either renting or reselling it before the legal authorities catch up to scam. Three Sentenced for Running Sophisticated Real Estate Fraud Scheme
- rental home scam: criminals find vacant properties on-line (and some go as far as to change the locks), then re-advertise them for rent on-line at “lower than market” rental rate on the home, either asking for deposit to hold the property or even showing up to unlock the house, and demanding you send them cash online or in hand to hold the property…or even charge full deposit with fake rental agreement, hand you the keys, and walk off leaving you to answer to police when owner finds out you moved into their home.
The first sign of trouble that was said in this article was…”she saw it on Craigslist.”
Even though Craigslist has been used by criminals, many other sites are also used…Internet property rental scams happen almost daily.
The article below is just a current example of many that show there are alot of people pretending to own and rent properties that actually don’t own them. They tend to be posting properties in tight rental markets and requiring online rent or application deposit …
Be aware you are exposing yourself to the scam without visitng property, meeting owner or owner rep there; rent price is too good to be true; and/or online payment of rental application fee or monthly rent up front. All are all signs of possible scams to take your money and not deliver.
Even be careful when you meet someone there – can they proved they own the property? Some criminals have been know to change the locks on a property and then can show you inside…
Some possible techniques to protect yourself from falling for these online rental property scams when the rent and location is too good to be true and it’s not listed through a licensed real estate agent, it seems like a super deal, or these other steps to protect you if you want to rent it:
– Ask the person you meet to share proof they own the property. If they represent an owner, they should still show proof they are representing the real owner.
– If you can, arrive earley for any appointment and ask the neighbors on both sides of property if they know property is for rent and if they know the owners or have their contact info and then contact the owners.
– Perform a search on the property tax office of the specific county’s/city’s website where the property is located to determine who the property owners are. Then either search for that owner’s contact info online, or ask the person you speak with on the phone or meet at property if they can provide the owner’s contact info…
If anyone you talk with or meet is uncomfortable providing paperwork proving they own the property or legally represent the owner, walk away with your money before “they” walk away with it!
Source of some information provided in the blog post: 5 Real Estate Scams to Be Aware Of