Stephanie Y. lives in New York. In 2022, she was looking for a new rental house for her family of six.
Eventually, she found the perfect place.
After securing the rental, Stephanie packed up her house and enrolled her children in their new school.
The family was excited to move into their new house.
A few days before they moved in, Stephanie and her husband went to the new place.
They found out that someone was still living there. So, Stephanie knocked on the door of the house and was met by the current tenant.
The current tenant said, “The scam victims ask me, ‘When are you going to leave because I paid my security deposit,’ and I say that we are not leaving.”
Stephanie and her family are out the money they paid for the security deposit, plus, they had nowhere to move to.
But Stephanie wasn’t the first person to knock on the door thinking they were soon moving in.
Sabrina L. paid a security deposit and the first month’s rent to move into the same house.
The family that currently lives in the house is concerned for their safety, and they want everyone to know that their house is not for rent.
However, the address was listed for rent on Zillow, and Craigslist. The listings include contact information for the person renting out the property.
The listings for the house look legitimate, and included pictures of the home and contact information for the landlord.
The listings even included the rental application and rental agreement.
The actual owner of the home said, “The victims are receiving a beautiful contract with my house/apartment address… and it looks like a legit lease agreement.”
When Zillow was contacted about the fraudulent listing they said…
“Our teams use several different tools to prevent inappropriate content publishing, but if a listing is found to be fraudulent after it’s posted, it is removed from our site as quickly as possible.”
With the current volatility in the real estate market, real estate scams are on the rise.
According to the FBI, losses from real estate scams totaled more than $350 million in 2021. This was a 64% increase from the previous year.
Considering this, here are a few of the most common real estate scams you need to be aware of, and simple ways you can protect yourself.
Rental scams:
Rental scams such as the one Stephanie fell victim to are all too common.
In 2021, more than 5 million people lost money because of rental scams.
Fake rental listings are on the rise, and they will often have enticing prices. And if the rental price of a home is too good to be true, then it clearly could be a scam.
Also, if the listing has no pictures or is vague it could be that a fraudster listed the rental.
If you contact a landlord about a rental and they say they are out of town or have an excuse why they can’t show you the property, then it could definitely be a fraud.
Don’t send the landlord money if you have not physically seen the property and know if someone is still living there.
Wire scams:
Real estate wire scams can be carried out in different ways.
But the most common way is when someone pretends to be your real estate agent and convinces you to send money.
To prevent this, always discuss payments and wire transfers with your agent in person.
Don’t send any money based on an email from your agent.
To be safe, meet with your agent and discuss the wire transfer and verify the paperwork.
Bait and switch:
The bait and switch scam is nothing new in the real estate industry.
Here’s how it works…
The scammer will advertise a property for sale or rent.
When the victim contacts them, the scammer will say the property is no longer available, but they happen to have a similar property that’s just as good.
The criminal will try to get the victim to visit or check out other properties that are overpriced or in poor condition.
To prevent this scam, you should do some research to make sure you are working with a respectable agent.
Perform internet searches about the agent to make sure there aren’t any reports of them conducting this type of scam.
Lockout clause:
A lockout clause can be a legitimate part of a real estate transaction. But it can also be used by scammers to steal money.
The lockout clause scam often targets sellers that are in a hurry to sell their property.
The criminal will act like they are in a hurry to close on the house. They will ask for a holding clause that prevents the seller from selling to anyone else.
Once they have the hold clause, the scammer will ask for money to do repairs or even a drop in the agreed-upon price.
You should avoid a holding clause whenever possible, because if the buyer is pressuring for the clause it could be a sign they are a scammer.
When it comes to real estate transactions you should read every detail of the contract. Consider paying a lawyer to read over all the documents.
When conducting a real estate transaction, take your time in the process and be careful sending money.
With the national real estate market in chaos, scammers will be looking to take advantage.
But here’s something else to think about…
If you’re a tenant, who gets would-be renters, or potential ne’er-do-wells snooping around your home or property, you need to be able to protect yourself and home.
