Whether you’re a prospective homebuyer, a tenant looking for a rental property, or an investor seeking lucrative opportunities, it’s essential to be aware of the risks and pitfalls that can accompany real estate transactions. Scammers have become more and more sophisticated with how they operate, which means that you should always be diligent in your approach.
Due to the high rate of real estate scams and real estate fraud that currently exists, it is always wiser to work with an experienced real estate attorney before signing any paperwork. In the meantime, we will provide you with valuable tips and insights to help you identify common real estate scams, empowering you to make informed decisions and protect yourself from financial losses and legal troubles.
Tip #1: Research and verify.
Due diligence is an important step in all major transactions, and it can help any prospective property owner or tenant avoid common real estate scams. Always research and verify the legitimacy of individuals, companies, or agencies involved in the transaction. Check their credentials, licenses and reputation through reliable sources like government registries and real estate associations.
Tip #2: If the price is too low, it’s questionable.
The saying, “You get what you pay for,” may apply here. If you come across a property that’s priced too far below other comps in the area, it could be a red flag. Oftentimes, scammers lure in unsuspecting buyers by posting hard to believe prices that are almost too good to be true. On top of researching the parties involved in the transaction, be sure to investigate market rates in the neighborhood to ensure the price you’re offered is within the range.
Tip #3: Request documentation.
It’s always better to have a paper trail in case you need it, than to have no proof if anything does go awry. Ask for copies of legal documents related to the property, such as title deeds, land surveys and property tax receipts. Take your time to carefully review any and all of these documents and make sure that you also consult with a real estate professional or lawyer if you have any doubts to be sure.
Tip #4: Visit the property in person.
Make sure you tour the property before you sign off on any documents to confirm that the seller is legitimate. Scammers often use fake listings or misleading photographs to trick buyers or renters. Insist on inspecting the property personally, or send a trusted representative. For those purchasing a property, professional inspections happen during the escrow process, but renters can also hire an inspector for peace of mind.
Tip #5: Be cautious with wire transfers.
Scammers commonly request payments through wire transfers or unconventional methods (such as gift cards or cryptocurrency) that are difficult to trace. Exercise caution when asked to make payments before signing contracts or without proper documentation.
Tip #6: High-pressure tactics are a warning flag.
One way that scammers operate is to use high pressure tactics to get you to act before you think. Beware of individuals who pressurize you to make immediate payments or sign contracts without allowing you sufficient time to review and consult with professionals. These tactics are often coupled with the low prices mentioned earlier, resulting in a “limited time” price drop.
Tip #7: Use reputable professionals.
When engaging in real estate transactions, seek the services of trusted professionals such as real estate agents, lawyers or brokers. Verify their credentials and experience to ensure they have a solid track record. Additionally, be wary of professionals recommended by the seller or property manager, as they could be part of the scam.
Tip #8: Beware of rental scams.
Rental scams are prevalent, particularly on online platforms where scammers don’t have to show their faces or can digitally alter images. Be cautious if the landlord asks for payment before you’ve had a chance to see the property or sign a lease agreement. Always use secure payment methods and be wary of deals that seem too good to be true.
Tip #9: Research online listings.
When searching for properties online, be cautious of fraudulent listings. Look for inconsistencies in the listing description, images that seem suspicious or look like stock photos and contact information that appears unprofessional or incomplete.
Tip #10: Trust your instincts.
If something feels off or too good to be true, it probably is. Trust your gut instinct when you see red flags. Before completing any type of a real estate transaction, consult with experienced legal counsel. They can help conduct any due diligence, as well as verify and vet the seller and the property in advance to save you time, money and undue stress.
Avoid Scams with the Help of an Experienced Real Estate Attorney
Remember, awareness and caution are crucial when dealing with real estate transactions. If you suspect fraud or encounter suspicious activity, report it to the appropriate authorities immediately. You can also involve an experienced real estate attorney, who can help you identify scammers and avoid fraudulent transactions. The attorneys at Gottlieb Law are prepared to assist you with securing an investment or finding a legitimate property to rent. Contact us today at 602-899-8188 to schedule an initial consultation or make an appointment on our contact us page.