When there’s a large asset on the line, there are always going to be scammers looking to take advantage of consumers, and the unfortunate part is they’re getting more creative, leading to major financial headaches for their unsuspecting victims. According to the Federal Bureau of Investigation’s Internet Crime Complaint Center, in 2018 alone, 11,300 victims reported real estate or rental fraud, resulting in losses of more than $149 million. Stay ahead of these shady schemes by learning what to look out for when you become a consumer in the real estate marketplace. 

  1. Wire Transfer Fraud: Currently a growing problem, this scam is one that buyers need to be aware of. It begins with the scammer gaining access to the information of a vendor involved in the closing of a property and sending the buyer an email with wiring instructions for the down payment. What’s scary is that the email will look dangerously like it’s coming from the escrow, the title company, the lender, or even the buyer’s real estate agent. This scam can be very difficult to identify, but typically emails sent outside of normal business hours, emails with poor grammar or misspellings, are all red flags. 
  2. Predatory Real Estate Loans: Unfortunately, it’s not uncommon that mortgage lenders take advantage of homebuyers by locking them into a loan with unfair or even abusive terms. Predatory loans often use deceptive practices in convincing a borrower to take out a loan that the borrower does not need or want, oftentimes using unscrupulous practices in an effort to get a borrower a loan they cannot afford. Look out for high interest rates, inflated late fees, and rigid terms. 
  3. Rental Scams: We cannot forget to mention one of the most common real estate scams in our country. 5.2 million U.S. renters say they have lost money from rental fraud, and with the internet becoming a vector for finding a lease, it’s not getting any better. Rental scams look a little something like this: Someone will post property rental ads on Craigslist or social media pages to lure in unsuspecting renters, sometimes using photos from a listing they are not connected to at all. They will ask for an upfront payment to let you see the property or hold it as a deposit. But beware, they’re just looking for a quick way to make some cash! Be suspicious of anyone who asks for a cash deposit upfront to see a property, and ensure you’re dealing with the real property owner before negotiating terms. 
  4. Home Inspection Scams: To disguise a major problem with a home, the owner might do a cosmetic fix, then lie on the property disclosure statement. They may even get the inspector in on the scam! Home inspections are valuable in helping a buyer determine problems in a home, but only when your inspector gives a full, detailed inspection. Inquiring about an inspector’s experience and background is CRUCIAL before you hire one, and sometimes real estate agents will recommend you hire several to be extra thorough.