How to Avoid Real Estate Scams

Global-G-How to Avoid Real Estate Scams

If you are moving to a new city for work or just looking for a quick vacation getaway, you need to be aware of a potential danger: real estate scams. Scammers are waiting to take advantage of you, especially if you are a newcomer to the area and don't have anyone to trust. Here is what you need to know about real estate scams and how you can avoid becoming a victim of financial fraud.

Common Types of Real Estate Scams

Some of the most common types of real estate scams include:

Fake Rental Listing Scams

Some scammers may advertise rentals that do not exist or are not available. In other situations, a scammer may take pictures and profile information from a property that belongs to someone else and pass it off as their own. The goal is to get you to pay for a rental that does not exist or hand over your personal information to steal your identity.

Some red flags of a rental listing scam include:

  • Duplicate advertisements for the same property
  • Better features and professional-looking pictures for a price that is not consistent with the local rental market
  • Out-of-area phone numbers
  • No phone number on the listing

Collective Investment Scams

In a collective real estate investment scam, fraudsters convince a group of people to pool their money and purchase an investment property. However, the fraudsters simply run off with the money and offer nothing in return.

Fraudsters may set up a variety of corporations and move the properties through them so that the original owners wind up losing their investment in the property unbeknownst to them, as happened in the case of Phuket.

Relief Package Phishing Scams

In light of the COVID-19 crisis, relief package phishing scams are more prevalent. You may receive an email that says it is from your landlord or a government agency that promises to provide you rental relief – if you fill out an application or otherwise give away your personal information to the scammer.

While such relief programs are available in some locales, you will not receive such communications unsolicited. Avoid this scam by reaching out to your landlord or local housing authority to learn about available options and to proactively request assistance.

How to Avoid Getting Scammed

There are certain warning signs that may pop up with these types of scams. Avoid becoming the latest victim of financial fraud by carefully vetting any real estate options for the following red flags:

  • You are asked to wire money – A common tactic by scammers is to ask you to wire them money through Western Union or similar service because they know once they get the money, there is no way for you to get it back. A legitimate property management company or landlord will not ask you to wire money.
  • You are required to provide a deposit or first month's rent before signing a lease – Scammers will try to get money as quickly as possible before you have a chance to vet the opportunity, including by asking for a security deposit or first month's rent before you have personally seen the unit or signed a lease. This can be a difficult one to get around if you are not located near the property, but if possible, try to get someone to verify the property is available and as described before handing over any money or signing anything.
  • The advertiser is out of the country – The scammer may insist they can get you keys from their agent or lawyer because they are out of the country, but this is often just a scam.

Conclusion

By being aware of these common tactics can help you avoid becoming the next victim of financial fraud.

About the author: David Lukić is an information privacy, security and compliance consultant at IDstrong.com. The passion to make cyber security accessible and interesting has led David to share all the knowledge he has.