real estate scams
Looking for a place to live can be a stimulating but difficult skill. Between balancing costs, closing documents, and square footage, the last thing a property holder wants is to become a target of a real estate scam. By establishing yourself as a resource for clients, you can protect your clients from fraud and progress their home buying and renting experience.
WHY ARE HOUSING SCAMS SO WIDESPREAD?
Real estate is a mutual target for crooks due to the large sums of money convoluted in transactions as well as the sharing of sensitive information among multiple parties. According to a study, real estate is the third most common sector for fraud attempts behind construction and commercial services. Housing scams are widespread across all aspects of the housing industry, with criminals targeting both renters and owners.
COMMON REAL ESTATE SCAMS AND FRAUD
WIRE TRANSFER FRAUD
A common form of real estate cybercrime is real estate wire fraud. This form of fraud often targets homebuyers as they pilot the process of purchasing a home. By hacking into email and other forms of communication, offenders can gain access to bank accounts, social security numbers, and other sensitive information. With this information, criminals can stop transactions and steal hundreds of thousands of rupees from your clients.
HOME TITLE THEFT
Home title theft, also known as deed theft, deed fraud, or house stealing, occurs when the title to a property is obtained illegally without an owner’s permission. House stealing often occurs at perilous stages of sales and refinance transactions, where funds and sensitive information are passed between parties. Thieves often acquire the information they need to execute a title theft by assuming the identity of a real estate expert or third party.
MORTGAGE FRAUD SCAMS
Home buying can be an intimidating and classy process, so homebuyers may be misinformed by “no strings attached” loans. This type of secured loan scam may promise a loan with low-interest rates or no concluding costs. Once the loan is settled, the new homeowner may discover higher interest rates and secret fees. Avoiding these scams starts with working with trustworthy lenders and encouraging clients to carefully review their closing documents.
In the wake of financial hardships, homeowners may fall behind on mortgage payments and risk losing their homes. In this situation, scammers may offer foreclosure relief to homeowners desperate to save their property. Unfortunately, foreclosure relief scams have become more prevalent during the pandemic; targeting homeowners who may have lost their jobs. If financial challenges are preventing a borrower from fulfilling mortgage payments, encourage them to talk with their lender to identify options for modifying loans, requesting forbearance, or other solutions.
Renters may experience a range of scams, which can lead to different levels of financial loss. A common rental scam includes fake rental advertisements. In this case, a scammer creates an ad for an apartment and efforts to collect a deposit or lease payment from a possible occupant. Any payment requests particularly via wire transfer or cash prior to meeting a landlord or signing a lease are red flags for rental scams. In other scenarios, scammers may lie about facilities.
Unfortunately, real estate scams don’t end when an owner receives the keys to their new home. Moving can provide additional chances for scams. Moving scams tend to fall into two sorts: (1) Companies that overcharge with secret fees and (2) corporations that accept a deposit and then vanish without a trace. To avoid moving scams.
PREVENTING REAL ESTATE FRAUD
Defending against real estate scams and fraud involves the protection of personal information and being aware of how criminals target homeowners and renters. Real estate swindles are constantly growing so nothing can prevent it entirely, but use the following best practices in an effort to help your clients avoid collective forms of fraud.
Reassure clients to do their due attentiveness: Buyers and renters must study companies and those with whom they partner. Encourage them to read online reviews and talk to real estate professionals about past involvements with certain companies or individuals.
Make yourself a supply for customers: Although proprietors and renters have access to more online resources than ever before, they still need real estate specialists to help guide them through the industry with their knowledge.
Warn clients about corporate red flags: If something seems suspicious, encourage clients to ask companies for additional information. Trustworthy companies will be clear about the information they need and why they need it.
If fraud occurs, encourage clients to file complaints, reporting a scam to the Better Business Bureau can warn others about potential scams.
Create a culture of security: Shielding client information starts with your core security practices and technology.