While you would assume that the people you’re dealing with in the real estate market are on the up and up, this sadly is not always the case. In fact, there are numerous frauds that homeowners, buyers, and even renters must avoid, from wasting money trying to modify their loans or investment scams promising limitless riches (which never materialize). Forbes offers the following information on three common scams and how you can avoid them.
In cities with a high-volume of renters, it’s not uncommon for housing listings to be re-appropriated fraudulently. Renters responding to an ad will often be asked for money for processing fees (usually stated to be for credit or background checks). In many cases, the person running the scam will then claim the application was denied or simply just vanish. Always be wary about providing any money to a real estate agent before actually seeing the home. You can also request verification of their employment to ensure they are who they say they are.
Faulty Loan Modifications
Loan modifications can help people facing foreclosure save their homes. Scams are often built around this process, which takes advantage of a homeowner’s desperation to avoid losing their homes. They often request exorbitant fees for their services, and ultimately no modification of the loan will take place (putting the homeowner in an even worse financial position). If you’re interested in modifying your loan, speak with your lender or work with a government agency, who will provide their services free of charge.
If anything seems too good to be true, it probably is. This is certainly the case with many real estate investment workshops, which promise attendees they will unlock the secrets of the investment market, so they can buy and sell property. However, the information provided might not lead to any prospects and you may end up shelling out exorbitant sums of money with no return. Additionally, many people that participate in these scams sign a release that prevents them from taking legal action.