Avoiding the 4 Most Common Real Estate Scams


Scams are prevalent in all businesses, and the real estate market isn't spared from them. Whether it be a contractor who asks to get paid for work not done or a seller projecting sketchy motives, they'll do anything to turn homeowners and prospective buyers' hard-earned money into a quick profit.

To help spot these schemes, here's a rundown of the most common real estate frauds. Plus, some advice on how to avoid them.

Online Rental/Sale Scams 

Fraudsters copy a listing and publish it on different websites with their information, pretending they're the owner or manager of the property. Others will hack into original posts and offer them at a very low price. They ask victims to wire a security deposit, months of advanced payment, or broker fees.

How to avoid them: Beware of sellers who ask for an upfront payment that must be wired abroad. Read all the terms and conditions before signing anything.

Mortgage Compression or Loan Modification Scams

This trick happens when a fake lender promises a buyer to take them out of their difficult financial situation. For instance, if they're having trouble paying for their monthly mortgage and they're dreading a foreclosure, so-called loan modification agencies tell victims they'll have their bills reduced. They'll ask them to pay an upfront fee or other complex strategies as bait.

How to avoid them: No company must ask for an upfront payment as it's illegal. Remember that no one can give a guarantee against foreclosure since the government processes this.

Property Investment Seminar Scams

Some legitimate speakers give beneficial information, but others exist only to take advantage of other people. Some seminars make money by charging attendance fees, selling overpriced reading materials and pressuring participants to buy a property.

How to avoid them: Do a thorough research of the event you're attending. Ensure that the speakers are credible and have a proven track record of what they'll discuss.

Deed Frauds

This fraud is a form of identity theft where the scammer pretends to be the legitimate homeowner of a house. They use fake documents to transfer the property into another person's name. They'll get a new mortgage and make the proprietor responsible for the payments.

How to avoid them: Coordinate with a title insurance provider. Never give away any personal information to anyone unreliable.

These 4 real estate scams are common. But, anyone can avoid them by talking to local enforcements or a credible home insurance company about title fraud prevention and other precautionary steps they can do to protect their assets.

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