Too-good-to-be true offers are often scams. Even when investing in real estate, one should be wary about a deal that is next to impossibly perfect. There is always a catch if you find a beautiful home in a good location being sold at a very affordable rate. With a bit of digging, homebuyers can determine if the seller is authentic and has no hidden agenda behind the sale. Unfortunately, many people buying houses still fall as victims of many real estate scams.
If you are in the market to buy your first home, it will help a lot to do extensive research before investing. This way, you can avoid losing money and wasting your precious time on a fraudulent home sale. Here are three examples of common home buying scams you don’t want to be a part of.
A home title fraud happens when someone tries to sell a property they don’t even own. Scammers usually steal the title of the property and the owner’s identity to sell the house to the largest bidder. Oftentimes, they are trying to sell the house to as many buyers they can trick.
Other times, fraudsters will try to apply for as many home equity loans as possible. They will then use the house as collateral without the intention of paying off the loan. The real homeowner will only know about the scam after receiving notice that their home will soon be foreclosed.
To make sure the seller is the real owner, verify the property ownership record, tax rolls, and property records. You can also check the recent deed online. For best results, work with a conveyancing lawyer.
Such a specialty lawyer can help make the home buying process a lot easier. They can handle all the paperwork needed so that all you have to do is prepare yourself for homeownership. For any legal questions, you can rely on their years of experience and knowledge to give you the best advice regarding the home purchase.
Wire Transfer Scam
According to reports, wire transfer fraudsters managed to score more than $150 million in 2018 alone. Homebuyers who are about to close a home purchase will suddenly find themselves losing their hard-earned money without even securing the home purchase. But how can something like happen?
One ongoing trend among scam artists is the wire transfer scam. The fraudster will pose as the home buyer’s real estate company or a title company and ask the buyers to wire the funds to a different account. On the other hand, the buyers, thinking nothing of the email, will wire the funds only to learn later on that they have been scammed.
Scammers manage to get into the home buyer’s email by hacking real estate firms and title companies. They keep a close eye on the transactions from the system and choose their next victim.
After copying the details of the transaction, they will study how emails are exchanged. On the closing day, they will send the buyer a different email. Hackers will usually pose as one of the firm’s legitimate entities and give buyers a new instruction, including where to wire the funds.
Even with the numerous occurrences of wire transfer scams in real estate, many homebuyers haven’t heard of these before. More often than not, both parties, the companies involved and the home buyers, want to keep the matter private. Another reason is that such crimes often lead to unsuccessful investigations.
To avoid this scam from ruining your finances and home buying experience, make sure to only transact on emails sent by your real estate company. If you receive another mail from a different email, call your agent first before providing any information or wiring any money. This is especially true if the first instruction differs from the last.
Property Cover-Up Scam
There are times when homebuyers end up with a property with many costly repairs, even if it seemed the sellers did a great job maintaining the house. Think structural damages, mold in the basement, or even massive water damage. Some sellers would do anything to get rid of their poorly maintained home, even if it meant teaming up a home inspector and their real estate agent.
Watch for warning signs that the seller did a bit of property cover-up, such as:
- Recent cosmetic changes
- Closing off a section of the house
- Pressuring you to close the sale asap
- Showing off a recent home inspection
- Overselling a particular part of the house
- Unwillingness to undergo a new home inspection under your inspector of choice
If your seller shows most of these signs, especially their reluctance when it comes to you choosing the home inspector, then it would be best to think twice before investing. You don’t want to buy a house full of costly repairs after just a few weeks or months of moving in.
Homebuyers should be vigilant in real estate scams. Bad guys are out there waiting for oblivious home buyers they can trick. Learn about the common frauds in real estate for a more successful home buying experience.