Thursday, September 19, 2013

Top Real Estate Scams and How to Avoid Them

Home Buying Frauds
DC property and other housing opportunities is a luxury for people who have their eye on real estate investments. In fact, with the current economic crisis, real property prices have gone down – making this a good time to purchase new homes or rent out a space. Sadly, there will always be those who take advantage of others when it comes to property. There are numerous scams out there, but they’re usually grouped into three categories: rental, workshop, and loan modification scams.

Rental Scams
Almost everyone does their house-hunting online at first; by going through home listings and/or real estate websites. That’s why the internet is littered with countless posers and huckster. This type of scam generally starts online, when a prospective buyer sets eyes on a spectacular deal that seems too good to be true. Scammers often take existing listings and post them on a different website, introducing themselves as the homeowner or someone authorized to rent that home on their behalf. The scenarios are the same: the unknowing renter will hand over the cash or wire the money as down payment, sometimes even going as far as actually living in the said home, before the real owners arrive – surprised that they have a guest.

Workshop Scams
Real estate seminars are valuable since they present a goldmine of ideas from certified individuals. The problem is when unqualified people pose as gurus only to profit from those who want to learn about the real estate business. This is particularly popular in dense urban cities where there’s a big demand for property knowledge (like New York or Washington DC). What normally happens is this: a self-proclaimed investment expert will promote an educational seminar online, pitching great ideas and even the promise of giving out top real estate secrets. Once at the seminar, people will learn that they’d have to pay in advance to get ‘additional information’ and ‘trade secrets’. There’s none of course, and the poser is long gone by then.

Loan Modification Scams
Real Estate Agent Frauds
This type of hoax includes fake foreclosure counseling, non-existent mass rejoinder lawsuits, and fraudulent ‘government’ modification programs to name a few. In the case of fake foreclosure counseling, the poser will offer to review paperwork in return for a fee. In extreme cases, he/she will ask for the house title as collateral. Mass rejoinder lawsuits happen when similar upset homeowners team up to sue a lender for unfair policies. The scammer will pose as a lawyer to defend their claim, but will ask for upfront legal fees. The most common deception though, is fraudulent ‘government’ housing programs. A con artist will pretend to be affiliated with them, collect information and fees, and may even give specific instructions like to stop paying the mortgage. This is quite an easy trap to fall into because these posers use official-looking websites and forms, as well as phone numbers.

Don’t Be a Victim!
First rule to keep in mind: avoid people who ask for immediate payment. Believe in the old adage that when something is ‘too good to be true’ – it probably is; so don’t buy it just yet. Investigate and ask lots of questions. Involve friends and family when it comes to homes for sale, so that they can refer certified brokers, realtors, and lawyers.


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