Learn to Recognize a Real Estate Scam Before it Starts
This content was created in collaboration with Dr. Phil, a spokesperson for Sundae.
Real estate scams come in all sizes and flavors. Here are some tips to make sure you’re not duped into getting less than top dollar for your home.
Real estate scams are all-too common. Unsuspecting homeowners in tough situations are often the prey of people looking to take advantage of those experiencing hardship. Something that seems too good to be true, may just be a scam. This article helps identify a scam and look for alternative options. That way, you can make the right decision for your situation when it comes to selling.
How can I avoid wire fraud in a real estate transaction?
Wire fraud is a growing problem in the real estate industry, with the National Association of Realtors noting that real estate wire fraud is one of the most prevalent cybercrimes in the U.S. It usually goes something like this. Via email, scammers pretend to be with the title company, a real estate agency, closing attorney, or other real estate professional. They provide wire instructions that send money directly into the scammer’s account — money that may be difficult if not impossible to recover once it’s sent.
To avoid falling for this type of wire fraud scam, consumers should never click on unsolicited emails. Be wary of emails that change instructions you’ve already received from a company. And always double-check any wire information by making a phone call to the company’s office and speaking with your representative. Don’t send any personal information via email, such as your social security number. There’s no such thing as being too suspicious when it comes to this type of potential scam.
I’ve been contacted by a company that says it can lower my home loan payments if I pay a high upfront fee. Is this legit?
If you find yourself in a pinch on your mortgage and receive an offer for an incredibly low interest rate or otherwise almost unbelievable deal on a new loan from a “mortgage agency,” you may be talking with a scammer. Advance-fee loans, loan flipping, and loan fraud all target homeowners who need a lower monthly mortgage rate to keep their home. They promise discounted loan rates for a high initial fee but often just hang the consumer out to dry.
Anytime someone reaches out to you and promises something that seems too good to be true, it’s wise to have a skeptical eye. Other red flags include:
- Asking for sensitive banking or personal information right away
- Not being willing to provide testimonials
- Offering deals no other company is offering
- Lack of connection with a traditional bank or well-known real estate company or service
If you’re trying to save your home from foreclosure, scammers will know you’re desperate and try to play on that desperation. Always double-check that the company or individual is legitimate, and never sign anything without reading it carefully and having it vetted by a knowledgeable third party.
Be on the lookout for certain wholesalers, too. Some will try to pay you as little as possible for your home and then turn around and immediately sell it for much more, pocketing the proceeds that could have been yours.
I’m selling my house and need to find a moving company. How do I avoid getting scammed?
The same rules apply here. These companies should be viewed as suspect right away:
- Offer drastically lower rates than other moving company’s quotes
- Use high-pressure sales tactics
- Want lots of money up front
Moving companies can scam you in all kinds of ways, from charging double or triple the moving quote once they show up for your stuff, taking a deposit and then never showing up, or taking your stuff and your money and then never delivering it.
You can get a moving company’s license number and check for any complaints with the U.S. Department of Transportation, scour online review sites and look for patterns of overcharging, and ask friends and families for referrals. You’ll want to be clear whether your moving quote is a binding quote, a non-binding quote, or a binding not-to-exceed quote according to US Consumer Reports. A small deposit might be required to secure your moving date. However, you shouldn’t need to pay most of the bill until after the company has performed its services. That way you can make sure that your stuff has made it to your new home or storage unit.
I need to sell my house, but I’m afraid of getting conned. How do I protect myself?
The best way to avoid getting scammed is to deal with only trustworthy companies that you initiate contact with yourself. Another warning sign is if the person starts asking for detailed personal or banking information when it’s not needed.
Real estate agents are licensed by each state and you can look up an agent’s license using your state’s database (here’s California’s as an example). Real estate agencies should be well-known in your area. You can call an agent’s home office to double-check that they work where they say they do. Lawyers are also licensed by state, and every state has a way of verifying lawyers credentials.
Sundae helps homeowners sell without worry
Whether you need to sell your home quickly for monetary reasons or you simply just want your real estate transaction to be as quick and painless as possible, Sundae provides a safe way to get top dollar for your home. At Sundae, we want homeowners to benefit from the upside of their equity instead of giving more to wholesalers.
Instead, Sundae connects you to a network of investors. You get to accept the offer that works best for you (and reject the ones that don’t). Instead of working with a scam site, with Sundae you’ll work with vetted investors and have the benefit of the seasoned Sundae team to walk you through every step of the process, including all the legal documents.
Dr. Phillip C. McGraw is a paid spokesperson for Sundae and made this content in partnership with the company. The views and opinions expressed by Dr. McGraw are solely his own and do not reflect those of CBS Media Ventures.