(DailyVibe.com) – The real estate market is tough: navigating interest rates, inflation, and whether it’s a buyer’s market or a seller’s market are tough things, even if you have a fantastic real estate agent on your side. If you’re on your own, especially in a low income situation, the search for housing can feel desperate — in many instances, you need at least 3.5 percent of the home’s value if you’re interested in purchasing.
Because of this, scammers may try to get you, and their housing scams are relatively common. If you have significant income, you’re also a target — scammers are all about people who have money.
To avoid these scams, it’s vital to familiarize yourself with them, in particular, scams involving wire fraud and rental opportunities. There are some red flags you should be aware of. Here’s what to look out for.
Wire Fraud Scams
The most common housing scams are wire frauds. This usually looks like a legitimate real estate transaction that involves moving large sums of money to sellers from buyers. Because this is common practice, scammers take advantage.
Per the National Association of Realtors, more than 13,000 people were wire fraud victims in the real estate and rental sector in 2020. This reflects a total loss of over $213 million. Per FBI data, that’s a 380 percent increase from 2017.
The scam works like this: a scammer calls, emails, or texts you pretending to be a trusted source such as an escrow company, a lender, or a seller. The fraudsters make fake websites resembling lending companies or escrow companies — even the ones you’re actually working with — and then they provide wiring information that is theirs, not the company’s.
Prior to sending money to a third party, make sure you confirm with your original lender to verify the information. Use only the numbers on your existing, official documentation. Never click foreign text or strange email links prior to verifying.
Rental Scams
Rental scams usually happen when a property owner or potential tenant misrepresents themselves. Fake rental ad responses and ads themselves can really hurt both a legitimate property owner or tenant. Knowing about how rental listing scams happen is vital to helping you avoid them.
This happens when someone totally unrelated to a property or the real property owner creates a false listing or rental ad. Then the fraudster asks for upfront payment as a deposit hold, or to allow the prospective renter to check out the property. These scammers abscond with the money.
To avoid this, never hand over money without a contract in writing, and do your best to verify the information. Public records will indicate whether a person presenting themselves as the property owner actually is the owner.
Other Scams to Be Aware Of
In addition to these rental and wire fraud scams, scammers take advantage of those in need of foreclosure relief and moving — two instances in which people are super stressed. Movers will often hold a customer’s things until they fork over more money than originally agreed upon. To avoid foreclosure relief and moving scams, evaluate companies via the Better Business Bureau or call your local Better Business Bureau or Chamber of Commerce to find the type of business you need.
Moving and finding new housing are stressful times, even when they’re exciting, welcomed, and positive. Scammers try to pressure and take advantage of people who are on a fast timetable to try to get you to ignore or overlook important details. With this information about fraud and scams in mind, make sure to do due diligence on every company you interact with by checking their ratings and asking for referrals.
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