There’s a mortgage closing phishing scam that’s targeting homebuyers. If you’re in the process of buying a house or plan to buy one soon, heeding these guidelines can help you stay protected.
Watch out for fake emails that look like the real thing
In today’s tech-savvy world so much information is available at our fingertips, and while this can be a good thing, it also leaves consumers open to internet scams. Online fraud can happen in any industry, including real estate, and it’s important to know the warning signs so you don’t become a victim. Phishing is when an internet scammer impersonates a business in order to get your personal info. For this scam, hackers are breaking into consumers’ and real estate professionals’ email accounts and gaining access to upcoming real estate transactions.
Rental ripoffs
When looking for a rental, you’ll first want to use a reputable website. Facebook postings or ads on Craigslist are often legitimate but aren’t platforms meant for advertising specific real estate listings, which means it can be easier to post fraudulently. Online swindlers have been known to post about a property, ask for money upfront as a security deposit or downpayment, and then disappear once they receive money. Young adults are especially susceptible to rental fraud, as scammers often target first-time renters. Beware of this scam, as it’s standard to see a property in person and have the opportunity to ask basic questions before being required to make a deposit.
Red Flags:
- Seller demands payment upfront
- Post from a social media account with no pictures
- Avoids sending further pictures upon request
- Lack of documentation
- Request for payment before a property visit
International wire transfers
Globalization has caused different parts of the world to be increasingly connected in the past few decades. In terms of real estate, the internet has made it easier for affluent buyers to invest in real estate overseas. This growing international market is positive in many ways but comes with new opportunities for scammers. According to an article published in The Miami Herald, the FBI reported almost $1 billion was “diverted or attempted to be diverted” and wired to unlawful accounts in 2017. In other words, this is becoming a bigger issue than ever before. Nobody is exempt, as the chairman of MIT’s Board of Trustees and a Supreme Court Judge were both reportedly the victims of online real estate scams.
Red Flags:
- Spelling errors in emails or other messaging systems
- The presentation of decisions as having strict deadlines
- Hasty changes to terms and conditions of the housing contract
- Refusal to speak on a call or seek a translator
Property plastic surgery
Sellers are often on a time crunch to get properties locked into a contract, which leaves little time to properly deal with the unexpected. Whether it’s mold, termites or even a lead-based paint used decades prior, unethical contractors and sellers will sweep problems under the rug if possible.
While many sellers are respected professionals and would fully fix the issue before listing, it doesn’t hurt to do your research as a buyer. Making sure a cosmetic change isn’t covering up a disaster underneath could save you thousands. Looks can be deceiving, so be sure to ask for the paperwork showing that routine inspections have been performed.
Red flags:
- Recent or unexpected cosmetic changes to the house
- An unwillingness to provide routine paperwork
- Closed doors or taped-off sections of a property
- Overselling a recently renovated area of the house
Real estate agent without a license
A real estate agent with an expired license is just as problematic as one without a license, so make sure your real estate transaction is legitimate by asking your real estate agent for their license. Social media pages and testimonials don’t necessarily mean that a real estate professional has their license, and a true professional probably won’t mind giving their client some peace of mind by verifying their qualifications. Real estate transactions are often both time consuming and expensive, so it’ll be well worth the time investment.
