The Most Common Real Estate Scams and How To Avoid Them
It’s safe to say that when it comes to buying a home or renting an apartment, the average person is far from an expert on the topic. According to the United States Census Bureau, the amount of Americans moving over a one year period has fallen to an all-time low of only 11.2% of people per year. What we’re trying to get at here is the fact that moving can be an uneasy feeling for a lot of us, and, unfortunately, people are out there to take advantage of that.
Real Estate is a massive industry that is incredibly susceptible to scammers. Unfortunately, average people have more of a chance falling for these scams, as they have less practice in dealing with issues in the field.
Consider The Consumer urges you to be proactive in avoiding Real Estate scams; learning what to look out for can avoid you falling for one. Let’s take a look at a few of the most common scams the Real Estate industry is currently facing.
Phony Listings – The Bait and Switch
Though we may not be able to pinpoint just one example, Phony, or Fake, Listings exist in a number of ways. You may find these listings on Craigslist, in a Facebook Ad, or even on supposedly reputable websites such as Zillow or Trulia.
The most common Phony Listing is the Bait and Switch. This is when a real estate agent lists an apartment that’s aesthetically pleasing, in a great location, at an unbeatable price. These listings usually sound too good to be true, because they are. The second you call asking about the listing, it won’t be available, but the broker will have one just like it, that they can show you some time next week. Now they have you shopping around for a place you don’t want.
Other common Phony Listings occur when brokers hold open houses, collect your application fees, and vanish—leaving you with nothing but a headache and an empty bank account.
To avoid these scams, it is suggested that you do a bit of research on your own before signing anything or surrendering your money. Look at the listing’s length of time on the market. If you consider it a good listing and it’s sitting there for more than five to six weeks, it’s a telltale sign that something is wrong. Either something is incredibly undesirable about the home, un-included in the pictures or description, or, it’s a fake! Do your research, you can never be too careful.
Fake Realtors, Fake Viewings
After finding a property you really like, the next step would be to phone the realtor who sets up plans to meet you there. On your way to the viewing, however, you get an unexpected call from the realtor who claims he has had a family emergency, or that he’s gotten into a small fender-bender, and will be unable to make it. They tell you not to worry, though, because the owner will be there to show you around.
Your realtor even goes the extra mile, apologizing profusely and promises to negotiate a lower price than what the landlord or owner is suggesting off the bat. “Call me when you leave” the realtor will likely end with “remember not to sign a lease before I talk to them.”
You continue the viewing and get a quote from the owner, but you, of course, were promised a better deal by your realtor. So you have them handle it, as they eventually call back with good news, saying that your asking price is okay—all you have to do is wire over the money for the first and last month’s rent and you’re all set to move in on such-and-such a date.
The only problem is you find that somebody else is moving in on that exact same date, perhaps. Oh yeah, and that realtor wasn’t a realtor at all. They simply found the property, reposted it online with their contact information, and they’ve already skipped town with your first and last month’s rent!
This scam may seem threatening, and that’s because it is. It can happen to anybody. To avoid these types of Fake Realtors we suggest only dealing with the most reputable real estate agents out there. Use the “big guys” and brand names to your advantage. After speaking to an agent working at a commercial firm such as Century 21, Re/Max, etc., Google them. All of their information is required to be online, with their employment specs. If anything seems fishy, we suggest backing away from the situation and starting over. Trust your gut.
These Real Estate scams don’t just stop at listings and viewings. After finding the perfect place, you must be wary of moving company scams as wells.
After securing an apartment, or buying your new home, be sure you don’t get swindled by your moving company. In short, it has been reported that people have hired moving companies, had their homes packed up onto the truck, but then the estimate they were given is disregarded as the company boosts their asking price (sometimes two to three-fold) after it’s too late to back out of the deal; essentially holding your belongings hostage.
People have also complained of “phantom deliveries” as well, where moving companies will pack up your things, take your money, and simply drive away. No, not to your new house, but to their house, with all of your things.
Much like listings and brokers, you can also research your movers as well. First off, try and get a recommendation from somebody you know that has used the company before, check the company’s online reviews, and make sure they look like a reputable, legitimate business operation (does their website have a real address? Contact information?). You may even check to see if your mover is licensed in your state, here.
You should, at no point, pay up front or give any type of deposit to a moving company. After your things are delivered, safely and soundly, is when most legitimate companies will expect you to pay. Furthermore, any cost estimates should be given to you in writing.
Keep Yourself Safe
In every case, you must trust your instincts. If at any point in the moving process things feel suspicious or dishonest, take a moment and do your research, and always proceed with caution.
If anything seems wrong about a place you’ve picked, or the person representing that place, walk away unharmed—there will always be other homes out there. Be cautious when signing your checks, wiring money or giving any financial information as well.
Always be proactive. If you believe you’ve been a victim, or were almost a victim of a Real Estate scam, be sure to report the crime to the Federal Trade Commission.
If you have been affected by a moving or real estate scam we ask that you reach out to us immediately to share your story and get involved in stopping these scams. We can be reached via Email at ConsiderTheConsumer@gmail.com, found on Twitter or Facebook, or you may even connect with us directly on our website! We look forward to hearing from all of you.
The above was a guest post from Consider The Consumer.