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Protecting Yourself from Real Estate Scams: Essential Tips for a Safe Home Purchase

Protecting Yourself from Real Estate

How Real Estate Scams Happen:

Real estate scammers use different tricks to take your money, personal details, or even your home. Since buying a home can be confusing, scammers find plenty of chances to deceive you.

Here’s how a typical real estate scam works:

Scammers pretend to be a lender, real estate agent, or title company. They might create fake home listings, send phishing emails and texts, or promise unbelievably good mortgage rates. Then, they talk to a home buyer or homeowner – usually through emails, texts, or calls (which are easier for scams than meeting in person). They use pushy sales tactics to make the victim feel rushed and pressured to act quickly. After that, the scammers persuade the victim to send money, often through a wire transfer or popular payment apps like Venmo, Cash App, or Zelle. Alternatively, they may trick you into sharing personal information that they can use to steal your identity or take over your home title. Once they get the money, the scammers vanish

The Seven Latest and Most Common Real Estate Scams

  • Real estate wire fraud
  • Mortgage wire fraud
  • Bait-and-switch home listings
  • Hidden property damage
  • We Buy Homes For Cash” scams
  • Foreclosure relief fraud
  • Reverse mortgage scams

Real Estate Wire Fraud: Losing Your Down Payment and Closing Costs

Real estate wire fraud happens when scammers steal the money a potential homebuyer is supposed to use for their down payment or closing costs. This type of scam is becoming more common across the country, especially in upscale housing markets.

Here’s how it works:

Scammers use a tactic called Business Email Compromise (BEC) to sneak into email conversations between buyers and their lawyers or mortgage companies. Then, they send fake information for wire transfers, directing the buyer’s payment straight to them.

Real Estate Wire Fraud

Mortgage Wire Fraud: Targeting Your Mortgage Payments

Mortgage wire fraud is like real estate wire fraud, but here scammers go after the money meant for your mortgage.

In these scams, the fraudsters gather a lot of details about borrowers, like the home they’re purchasing and their loan arrangement. Then, they pretend to be someone from the lender’s office and claim there’s a change in the wiring instructions for the buyer’s mortgage payments.

How to spot a scam (and what to do):

Don’t respond to emails saying there’s a need to alter the wire transfer instructions. Instead, call your direct contact to confirm if they genuinely sent that information.

Bait-and-Switch Home Listings: Deceptive Tactics to Watch Out For

Bait-and-switch scams happen when a potential homebuyer calls a realtor or real estate agent about a home they saw advertised for sale, usually on websites like Zillow, Craigslist, or social media, and it looks too good to be true.

Here’s how it typically goes down:

The agent tells the caller that the advertised home is no longer available and then suggests other listings that are either more expensive or of lower quality.

These practices break the rules of the FTC Act because they are unfair and deceptive. Proving bait-and-switch tactics can be challenging, though.

Sometimes, legitimate agents might have an inactive listing on their profile. In such cases, the agent would offer to show similar units at a comparable price, size, and quality—not something priced too high or of lower quality.

How to spot a scam (and what to do):

Thoroughly research any ‘too good to be true’ home listings and compare them to similar ones in the area. If you suspect bait-and-switch tactics, stop working with those agents and avoid sharing your personal information. Before working with any real estate professionals for the first time, do your homework and research them thoroughly.

Undisclosed Property Damage (and Untrustworthy Home Inspectors)

Homebuyers can fall prey to scams during property inspections. In some cases, home inspectors might knowingly conduct a subpar inspection, or they may lack the expertise required for a thorough examination.

In either situation, the outcome is a report that overlooks issues or purposely omits crucial information. Sadly, the buyer is then left with a home that requires unexpected repairs.

We Buy Homes For Cash” scams

We Buy Houses for Cash Scams

Homeowners facing foreclosure, struggling with home repairs, or needing a quick sale “as is” may be attracted to offers claiming, “We Buy Homes For Cash.”

While some companies genuinely purchase properties for fast cash, there are also scammers using this as a disguise for their fraud.

Scammers entice sellers with promises to buy their homes for cash “as is.” However, they may attempt to make the seller sign over the deed before actually paying for the house [*], or they could impose “hidden fees” on the homeowner after the contract is signed (or even before, with no intention of buying the house).

How to spot a scam (and what to do):

Check the legitimacy of any cash purchase companies through resources like the Better Business Bureau (BBB) for past ratings or complaints. Additionally, search the business name along with terms like “scam,” “fraud,” or “reviews” to see what previous customers have experienced. Avoid proceeding if the person or company is pressuring you to make quick decisions, rushing you into signing a contract, or asking you to transfer the deed before the closing (or before receiving payment). Don’t pay any fees before the closing and request proof of funds to ensure the sale is genuine. If the buyer refuses, it’s likely a scam.

Foreclosure Relief Scams and Other Deceptive Refinancing Schemes

Scammers reach out to individuals struggling with mortgage payments, making promises to modify their loans for an upfront fee or prevent foreclosure. Unfortunately, these promises are empty, and victims end up paying fees for services that don’t help.

In more severe cases, fraudsters pretend to be “leaseback companies,” convincing victims to transfer their deeds. However, the supposed “rent” ends up costing more than a mortgage, resulting in victims losing their homes.

How to spot a scam (and what to do):

Be cautious of loan modification programs or foreclosure counselors asking for upfront fees before providing services – these are likely scams. Avoid individuals pressuring you to pay or using scare tactics; they are likely scammers. Don’t work with anyone instructing you to send mortgage payments directly to them, advising against contacting your mortgage company, or urging you to sign your deed over to them. Don’t resort to declaring bankruptcy to “delay” foreclosure. If you need help, reach out to your lender or a government agency like the U.S. Department of Housing and Urban Development (HUD).

Reverse Mortgage Scams: Targeting Older Homeowners

Reverse mortgages are loans for homeowners aged 62 and above [*], allowing them to borrow against their home’s equity without repayment until they move or pass away.

While legitimate reverse mortgages exist, con artists frequently exploit seniors with fake schemes that deceive homeowners into losing money, equity, and sometimes their homes.

How to spot a scam (and what to do):

Verify the legitimacy of the reverse mortgage lender by checking their Better Business Bureau (BBB) status and reading customer reviews. Avoid signing any documents you don’t fully understand. Refuse to work with anyone using pressure or scare tactics to force you into signing a contract. Ensure the lender offers loans backed by the federal government. If uncertain, consult a trusted expert like a financial advisor or a HUD-certified housing counselor.

Safeguard Your Home Sale: Choose Call for Offer and Dodge ‘We Buy Houses’ Scams”:

Don’t let the fear of scams hold you back when it comes to selling your house. If you’re looking to avoid ‘we buy houses’ scams, Call for Offer is here to provide a safe and reliable solution for you.

Look no further! At Call for Offer, we specialize in facilitating seamless cash transactions for as-is properties. Our commitment is to ensure a hassle-free process for you. Unlike some scams, we don’t charge any fees or commissions. We are fully transparent and equipped to assist you in efficiently closing the deal.

If you’re ready to sell your house quickly and hassle-free, contact Call for Offer today. Let us simplify the selling process for you. Our dedicated team is here to provide a tailored solution, offering you a fair and competitive offer for your home, regardless of its current condition.

Take the first step toward a stress-free home-selling experience—reach out to us at 951-400-4373. Your convenience and satisfaction are our top priorities.

With Call for Offer, you can confidently explore the options available for selling your house, knowing that you are dealing with a trustworthy and reputable team. Don’t fall for scams—choose the reliable path to a successful home sale with Call for Offer.

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