As technology increases and improves, so do scam techniques and strategies. As realtors, we have first-hand experience with several different kinds of real estate scams that people face. Here are the different scams you should watch out for and some strategies to protect yourself from housing scams.
1. Home for Rent
Just the other day we listed a property for sale for one of our clients. A few days later, the home popped up on Craigslist as a rental home. Scammers were able to pull our photos off the internet and create their own ad for the home as if it were a rental property.
Scammers use this strategy quite often as it’s pretty easy to steal photos off of the internet and repurpose them in a nefarious housing ad. The scammers would then try to get someone to pay a deposit for the rental. Of course, the home is owned by someone else and it cannot actually be rented out. So, the scammer would then disappear with the money and you wouldn’t be able to move in to what you thought was going to be your new rental home.
Ways to avoid rental scams
If you’re looking for homes to rent and concerned the home your looking at may be a scam, the best way to find out is to google the address. If the home is listed for sale, it should show up in a google search on Zillow, Realtor.com and other real estate websites.
Never wire money or send it over the internet unless you know without a doubt that the source is reliable. Facebook makes it really easy to send and receive money. But you shouldn’t send money with Facebook for something like a rental property, unless you are able to verify the source.
Another way to verify whether a rental advertisement is a scam or not is to look up the rental agency. If there is a rental agency managing the property, they will likely have a website. Even if they don’t have a website, you should be able to find some bit of info online. At the very least, they will probably have reviews on Google and you can make sure they are reliable.
2. Air BnB / Short Term Rentals
This is another type of real estate scam we’ve seen recently. A home is listed for sale. The next thing you know it pops up on Air BnB. These scams can be harder to spot as Air BnB typically does not reveal the address of the property.
This is where you will want to dig into the reviews. If the property doesn’t have any reviews on Air BnB, it could be because it’s a scam or it could just be a new home. Check out the host on Air BnB and make sure they seem legit. Air BnB does vet their hosts pretty well, but it’s something to watch out for with short term rentals. You can also look at homes in the area on Zillow to make sure the Air BnB you’re interested in doesn’t pop up as a home that is actually for sale.
Pay attention to the description on Air BnB as well. Sometimes scammers just copy the listing description. If the ad sounds more like a home is for sale than set up for a short term stay, you may want to dig deeper.
3. ‘It looks like you may need a new roof’… scam
This scam can happen two different ways and generally impacts the seller of a home.
a) So-called handyman rents out your home
We’ve seen this scam from time to time. It generally is targeted at vacant properties. Someone claims to be a contractor offering a roofing quote or other handyman service to a seller that was not requested. They may reach out and ask for access to a home in order to provide an estimate or a service. These scammers might claim that a realtor recommended they look at the property.
Once they have access, they may put the home up for rent and sometimes even get people moved into the house. They then make off with the first month’s rent and leave you with unwanted tenants who aren’t aware that you actually own the home.
Unless your realtor has suggested certain repairs and you have discussed the details, do not give a contractor access to your home on this premise. Also, be sure you verify with your realtor who they recommend if you are doing any repairs. You’re realtor will be able to recommend reliable contractors that will get the work done properly.
b) Pay us in advance
A similar scam occurs when a vendor reaches out to provide a quote and then demands advance payment for work. An alleged contractor may reach out to you and suggest that you asked them to bid repairs for your roof. They then request advance payment for the work they are promising to do. Once they have the advance payment, they disappear.
Whenever you are having a repair or service completed for your home, do not pay in advance. Make sure the work is completed, to adequate standards, before you pay. If a contractor does request an advance for supplies or equipment needed to complete a job, request to see receipts for verification.
You should also be sure you are hiring someone you can trust. Get recommendations from people you know or from a realtor. And, be sure to take a look at the company’s reviews on Google or Facebook.
Avoiding Handyman Scams
These scams are more easily avoided (than the rental scams mentioned above). If you own a vacant property, do not give anyone access to the home unless you personally have reached out to a credible vendor for a service or have discussed the details with your real estate agent. You can also drive by the property or have someone check on it regularly for you. If you have already moved and the home you are selling is vacant, talk to your realtor. They might be willing to drive by the home on a weekly basis to make sure nothing fishy is taking place.
If you are living in the house you are selling, it’s even easier to avoid this type of scam. If a vendor reaches out to you offering to provide a service that you did not request, it may be a scam. In this case, you most likely do not need the service they are offering. Ignore them and that’s the end of it.
If you do need a particular service, you will probably want to find a contractor you trust on your own or ask a realtor to recommend someone they have used. This will ensure that you don’t have unnecessary work completed or pay for something that will never actually get done.
4. Wire Fraud
Another type of scam you should be aware of when it comes to buying and selling real estate is wire fraud. When you are purchasing a home you will have to give the title company your earnest money deposit, at the beginning of a deal. At the close of a deal, you will give them the remainder of your down payment. You can do this by hand delivering a check or sometimes, by wiring money.
It is extremely easy for scammers to falsify email content and make it look like it is coming from your realtor, your lender, or your title company. If you are planning on wiring money, make sure you verify all the details with the title company over the phone before you request the wire from your bank.
If you were not planning to wire money to the title company and receive instructions for doing so, call the title company before you do anything. Verify over the phone that the wire instructions are actually from the company and that the numbers are correct for their account.
As a rule of thumb, you should never wire money based solely on instructions you receive in an email. Always call the company you are wiring money to and verify the details completely before sending any money.
To Sum Up
That wraps up some of the common scams we’ve seen in real estate. A good practice, however, for avoiding any type of scam is to check facts. Whenever you aren’t sure about something, Google the company. If you can’t find any information at all about them online, they may not be legit.
Check Google reviews. Most businesses have a Google business listed that shows up when you search for their company. See what kind of reviews they have. You can also look them up on Facebook. In this day and age, most companies have a Facebook page. You can look at their content and reviews to get a feel for credibility.
Also be sure to read any emails from unknown sources carefully. If the sentences don’t make sense or things sound jumbled it’s probably a scam. If the details are really vague, it’s probably a scam.