2024 Real Estate Scams: Tips for Buyers and Renters

 

Buying a home is a significant milestone, but it's also becoming a target for criminals through various real estate fraud schemes, leaving many victims with minimal recourse. A recent report from CertifID on wire fraud in 2024 indicates that 1 in 20 Americans involved in home transactions over the last three years have experienced some form of real estate fraud, with average losses surpassing $70,000 due to stolen down payments and proceeds. Renters are also increasingly affected, with the FBI's Internet Crime Complaint Center noting a 64% increase in rental scams in 2021 alone.
This article aims to provide practical advice and actionable steps to help you identify, avoid, and respond to these scams effectively.

 

Dangerous Real Estate Scams To Avoid

Listing Scams

Listing scams are prevalent in the real estate market, with 43.1% of American renters having encountered or fallen victim to a rental scam. Scammers often use popular rental platforms like Craigslist, which lack robust monitoring, to lure unsuspecting renters. A common tactic is the bait-and-switch scam, where scammers post appealing photos and descriptions to attract renters, only to reveal the actual, less desirable property later.

 

How to Avoid Listing Scams

  • Watch Out for "Too Good to Be True" Listings: If a deal seems too perfect, it probably is.
  • Research the Real Estate Professional: Verify the credentials and background of the real estate professional you plan to work with.
  • Check Listing Photos: Look for MLS watermarks, which could indicate that photos have been copied from legitimate listings without authorization.

 

Foreclosure Relief Fraud

Foreclosure relief fraud preys on vulnerable homeowners facing foreclosure. Scammers claim to have special relationships with lenders or promise guaranteed results in exchange for upfront fees, advising homeowners to stop contacting their lenders and making mortgage payments.

Room full of boxes, plants, guitar, step ladder

 

How to Avoid Foreclosure Relief Scams

  • Be Wary of Upfront Fees: Legitimate foreclosure relief services do not require upfront payments.
  • Verify Legitimacy: Research the credentials of any company or individual offering foreclosure relief and check for complaints with the Better Business Bureau.
  • Communicate with Lenders: Continue to communicate directly with your lender and seek assistance from HUD-approved housing counselors.

 

Deed and Title Fraud

Deed and title fraud involves criminals fraudulently transferring ownership of a property. The FBI’s 2023 Internet Crime Report tracked 9,521 complaints of cyber-related real estate and rental fraud, with losses exceeding $145 million. This type of fraud can have severe financial and emotional impacts on homeowners.

 

How to Avoid Deed and Title Fraud

  • Regularly Check Property Records: Ensure that the title is in your name.
  • Consider Title Insurance: This can protect against potential fraud.
  • Monitor Credit Reports: Watch for suspicious activity and place a fraud alert or credit freeze if necessary.
  • Use Home Title Monitoring Services: Receive alerts about any changes or filings related to your property.

 

Wise Fraud

Wise fraud involves scammers creating fake listings, using high-pressure sales tactics, and offering fraudulent mortgage services with promises of guaranteed results. Common red flags include unusually low fees, requests for upfront payments, and offers that seem too good to be true.

 

How to Avoid Wise Fraud

  • Verify Credentials: Check the licenses and read reviews of any real estate or mortgage professional.
  • Avoid Upfront Payments: Be cautious of guaranteed results.
  • Research Independently: Investigate property or mortgage details and consult trusted advisors.
  • Report Suspicious Behavior: Notify local authorities and regulatory bodies.
  • Use Reputable Services: Seek referrals from trusted sources.

 

Real Estate Investment Scams

Real estate investment scam seminars often promise "exclusive" investment opportunities, using high-pressure sales tactics and misleading success stories. These seminars typically lack proper credentials or a verifiable track record.

 

How to Detect Real Estate Investment Scams

  • Research the Speaker and Seminar: Verify the credentials and background of the speaker or organization. Look for reviews or complaints online.
  • Avoid High-Pressure Tactics: Be wary of seminars pushing quick decisions or large upfront fees.
  • Seek Independent Advice: Consult with a trusted financial advisor or real estate expert before investing.
  • Verify Claims: Cross-check any investment claims or success stories with independent sources.

 

Victim of a Real Estate Scam? Here's What to Do!

If you fall victim to a real estate scam, take the following steps immediately to minimize the damage:

  • Contact Financial Institutions: Report the scam to your bank or lender and secure your accounts.
  • Report to Authorities: Notify local law enforcement and relevant federal agencies such as the FTC or IC3.
  • Notify Credit Bureaus: Place a fraud alert or credit freeze on your credit reports to prevent further identity theft.
  • Document Evidence: Keep detailed records of all scam-related communications and transactions.
  • Seek Legal Advice: Consult with a legal professional who specializes in fraud or real estate law to explore your options and seek potential recovery.

 

The Bottom Line

Real estate scams are a serious threat with significant potential impacts. By staying informed, conducting thorough research, and being vigilant, you can protect yourself from fraud. If you do fall victim, taking prompt action can help mitigate the damage.

Remember, awareness and caution are your best defenses against real estate fraud in 2024.