For most Americans, becoming a homeowner is a dream come true. Sadly, there are some people who love to take advantage of other people and their desires. In the time of crisis, real estate scams are especially popular among fraudsters.
In times difficult such as these we live in, more and more people are having trouble paying their mortgage on time. Although there are some relief options for homeowners, a lot of them are still having problem clearing their debt. At the same time, home buyers and renters are stuck with lack of good listings and they have troubles finding the right homes. When people are panicking all around the world, fraudsters conducting real estate scams are thriving. Here are some of the real estate frauds that you should especially be aware of during the Covid-19 pandemic, and to protect yourself.
This scam targets tenants and buyers who are trying to find a new place to stay. There are a few variations of this scam, but all of them work by making you pay a deposit for a listing that doesn’t exist.
For example, a fraudster might simply download a few random images, type in fake information, and create a listing that doesn’t really exist. When you want to buy or to rent that listing, you will be asked to place a deposit, which is a standard procedure, except that this time you will be required to place a down payment before ever viewing the house in person. This is especially made easier thanks to the social distancing practice, as now less and less people are willing to hold or go to an open house, to lower the risk of getting sick. Once you have paid your deposit, the scammer will block you or simply stop communicating and disappear with your money.
Another way you can become a victim of these real estate scams is if a scammer leverages a real, existing listing. Sometimes, fraudsters may take all details from a real listing and copy it on unregulated platforms, such as Facebook Marketplace or Craigslist. They will usually ‘list’ the house at below market price to attract more unaware buyers. These scams are dangerous as you may even go and visit the location from the outside and not notice that anything is wrong with that particular listing you are looking at. As you are not allowed to go to an open house do to the pandemic, you most likely won’t ever get to talk to real owners of that home. Once again, as soon as you’ve placed the deposit or the down payment, the alleged seller will disappear and you will never hear from them again.
The best way to protect yourself from this scam is to always search on official listing sites, such as MLS. Additionally, you can use the Google Reverse image search to ensure that the photos are original.
It isn’t rare of scammers to pose as an authority of any sort in order to try to collect your data. In the latest months, it is common of fraudsters to send fake emails proposing various sorts of alleged Covid-19 relief, and the only thing you should do to receive free masks, medicine or even rent and mortgage relief is to give them your personal and bank account information.
If you have caught the eye of a scammer, they will try to use the email address similar to the one your landlord or government uses. Most people will be more than thrilled to get those vouchers for lower rent or free things, so they won’t even consider checking the legitimacy of the information before sending their personal data. The worst part is that you most likely won’t see any consequences for weeks or even months, and then the identity theft will happen.
The best way to protect yourself from this fraud is to call your landlord or government representative to check if the information is valid. Never give your information to anyone before double checking everything. Go to the official website of your government if you don’t have a way to contact them directly. Any relief funds should be public information. Also, compare the email address to the official one listed on the website.
These real estate scams usually aren’t talked about, but they are real. The scammer will rent a property from a landlord, who will, in the era of Covid-19, allow the renter to pay online or will collect checks every few months, to avoid direct contact. Then, the ‘renter’ will pretend to be the landlord and will sublet the unit to someone else, for a higher price. Another option is that the scammer will rent to unit to someone else, but ask them to pay for a few months in advance, and then disappear with the money. On rare occasions, the sublet unit can be subject to a fraud. This is dangerous, as then the original owner is placed in legal trouble as well.
The only way to be safe from these real estate scams is to frequently visit the unit, or to have some person you trust visit the property instead of you. This way you will be able to personally see who is staying in your unit. If this is too drastic for you, or if you are not able to visit the unit at all, it is always a good idea to ask future tenants about any references from previous landlords.
On the other hand, tenants should always be careful if a landlord asks for more rents in advance. Also, there are several online resources where you can see who the legal owner of the property is. This will help you determine if you are a subject of real estate scams, or if your rental offer is real.
Foreclosure frauds are the most common frauds that occur in any crisis. Homeowners who fear foreclosure are often times gullible and will catch onto any straw, just to keep their property. Scammers will use this to offer non-traditional financing and reliefs. Sometimes, they will require some payment beforehand so they could allegedly lower your monthly payments or make you free of debt. After you’ve paid them, they will disappear and you will be left in debt and without that cash. On other occasions, they will convince you to sign another mortgage, a hypothec or lien, which will allow the scammer’s name to appear on the title. Then, the scammer will foreclose on the pretense that you’ve failed to comply some clause. This will leave you with no choice but to sell your house to pay off debt.
The best way to ensure that you are safe is to always communicate with your lender when you have trouble paying mortgage. Also, if someone offers you a solution for your financial struggle, check with your lender or lawyer first to ensure that the offer isn’t one of real estate scams. Keep in mind that no one who is legit will ever ask you to pay them in advance without any insurance that the offer is real.
If you want to sell your Milwaukee, Wisconsin property and to avoid real estate scams, contact Sparks Property Investors LLC today to get a CASH OFFER! (262) 288-0580