Common Real Estate Scams and How to Protect Yourself Legally
Real estate transactions are high-dollar, so it’s no shock people are doing everything they can to defraud buyers. The scams are even more prevalent when you’re buying, selling, or renting properties, and you should know about the scams to avoid financial loss and legal trouble. These are some of the most common real estate scams, and some legal protection every homebuyer and seller should know.
Title Fraud
Theft of a title is when a thief somehow obtains the homeowner’s identity and, without the owner’s consent, has the home transferred into another person’s name, with another person’s signature on the deed. Then they borrow against your home or sell it without even mentioning that they are doing so.
How to Protect Yourself:
- Check your title periodically to see if it was modified.
- Get title insurance in case of any fraud.
- Don’t just give your information away online.
Mortgage Fraud
Mortgage frauds come in many shapes and sizes, not all involving elaborate schemes like falsifying appraisals or submitting forgeries of work records from third-party vendors, or even out-and-out identity theft. In others, tricksters have the buyer sign mortgage papers that the buyer later realizes they do not understand.
How to Protect Yourself:
- Make sure you always have a trusted real estate lawyer review the mortgage papers.
- Always double-check who you are transacting with money-wise.
- Report any loan offers that appear to be too good to be true.
Rental Scams
Con artists may pretend to be landlords and advertise properties that they don’t actually own. They demand deposits or rent in advance and then vanish as soon as payment is secured. This sort of thing is particularly prevalent with online rental ads.
How to Protect Yourself:
- Go to see the house before you pay anything.
- Insist on a signed lease and confirm the landlord’s ownership.
- Be wary of landlords who hurry transactions or refuse to meet face-to-face.
Fake Real Estate Listings
Some of these categories of scams involve people impersonating the landlords of homes. They will demand money up front, telling you that you are borrowing or receiving money, and after receiving the money from you, they run off.
How to Protect Yourself:
- Check who owns the property using official land registry records.
- Please do not pay the seller before verifying their authenticity.
- Use a real estate attorney to handle the deal.
Foreclosure and Distressed Property Scams
Homeowners on the brink of foreclosure have been a favoured target of scam artists. They promise to “save” the property for a fee, but typically end up either taking over the property or stripping it of any remaining equity.
How to Protect Yourself:
- Do not sign papers without them being vetted legally, particularly when under financial pressure!
- For genuine foreclosure help, talk to a real estate lawyer.
- Watch out for a solicitation that purports to “fix” foreclosure problems.
Conclusion
Real estate fraud can have devastating financial and legal repercussions. By staying informed and having a team of professionals you trust, such as real estate lawyers, you can protect your investments. Whether you are a buyer, seller or renter, Kalia Law Firm can offer you the advice and information you need to protect your interests and make sure your loan closes securely.