Homebuyers: Avoid These 3 Common Property Scams
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As if the stress of buying a home wasn’t enough, property scams are now an increasingly common threat to watch out for.
Sofia Vyshnevska, a housing expert and co-founder and COO at NewHomesMate, a marketplace for new construction homes, shared the three most common homebuying scams that are on the rise, along with tips on how to avoid them.
Also, protect your cash from these common scams in 2024.
Wire Fraud
One common type of real estate fraud is wire fraud. In this case, fraudsters intercept and steal money that is transferred from your bank during real estate transactions. You may be paying an escrow company or lender, but the funds routed get sent to a third party instead.
“Scammers hack or fake real estate brokers’, lawyers’, or title companies’ email addresses and give homebuyers false wire transfer instructions for down payments and closing costs,” Vyshnevska said.
To avoid being victimized by this scam, double-check all information when making a wire transfer, “especially when you receive any requests to change banks, account numbers, or recipients,” Vyshnevska said. “In such a case, call the title company or real estate agent directly (not on the number provided in the email), and check if it is legitimate.”
Be suspicious of last-minute changes to payment instructions and urgent requests that encourage you to hurry up with your payment. And, of course, look for the usual signs of a scam including errors or inconsistencies in the email address, name or body. Note that these errors may be quite minor, so wear your reading glasses.
Title Fraud
Scam artists may take out loans using the equity in homes that they do not own. They may also transfer property ownership to someone other than the rightful owner using false identification and falsified documentation.
“The best strategy here is to keep an eye on your bills to make sure they are coming in regularly and in the correct name. We are living in a digitized world, and municipalities have digitized their property records,” Vyshnevska said. “So you can either search the database on the official county website or use trusted third-party information providers to check and make sure your title is in your name and the information is correct.
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In addition, you can purchase a title insurance policy, which will protect you from potential fraud and any legal fees that arise.
Phantom Properties
Yet another common scam homebuyers face today is known as “phantom properties.” In this scenario, fraudsters make fake listings for properties that do not exist or are not for sale, with the intent of stealing application fees or deposits from buyers. This scam, too, can be avoided.
“First of all, homebuyers should use trusted real estate websites and County Recorder’s Office records to verify that the property exists and is legitimately available,” Vyshnevska said. “Also, do not hand over money until after you have toured the property. If the vendor or landlord refuses, avoid it. And finally, avoid excessive payment requests or advance costs, especially if they utilize unique means such as cryptocurrency.”
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