Dont Get Scammed in a Real Estate Deal!

By: Lisa Brodeur

There are a number of scammers who prey on real estate buyers and sellers, and the Internet is becoming their main playground. Millions of dollars are lost each year to scammers, not to mention loss of credit and reputation through identity theft. Here is a compilation of some real estate scams you should watch out for. Caveat emptor!

Predatory Lending:

This is getting a lot of attention in the real estate world, due to the number of homes going into foreclosure due to high interest rates. There are some companies that will take advantage of a home buyer's ignorance and desire to own their own home to charge extremely high rates, fail to disclose information that would .

The Fake Landlord Scam:

If you're selling a house, you might keep an eye out on Craigslist. Scammers have been known to check the MLS for likely looking houses, then advertise the same house on Craigslist and other online buy-and-sell sites. They then use the place to scam people looking for a place to rent, by charging fees for keys sent to the potential renter and even collecting "damage deposits" and "rent". This often lands scammed renters on the real owner's doorstep, demanding their money back and/or threatening litigation.

The Bait and Switch Scam:

The bait and switch is when a property is initially advertised at a very attractive price, but things change once you go to close the deal. The seller is banking on the likelihood that you might go ahead with the transaction if you've spent a lot of time and money negotiating for the property. Just keep in mind that you'll be a lot more uncomfortable with an unaffordable mortgage than by suspending the mortgage. Read before you sign.

Identity Theft:

A mortgage quote can mean that your personal information is fair game for the Internet to play with. Lenders all over the country can see your information if you register with some firms. Applications solicited over the phone or the Internet are also suspicious. Don't give your personal information to anyone or any company you can't verify as legitimate. Also, inquire as to what steps your loan officer is taking to prevent your identity from becoming a scammer's plaything.

The Equity Stripping Scam:

This is played on people who are in bad financial straits. Someone contacts them and promises to help them out by buying the property at a really low price, paying the mortgage, and then selling the property back to the family for a slightly inflated price. Win-win, right? Wrong. When the person/"company" gets hold of the deed to the property, they evict the family legally from the premises and then sell the property at a profit.

A lot of these scams depend on the homeowner or potential buyer being alone without the guidance of a real estate professional. Scammers don't like it when you have advice from a professional, since it usually runs contrary to the get-rich-quick, it's-our-little-secret scheme. If you're presented with an offer that seems too good to be true, it's probably just that. Get a REALTOR(R)'s or another professionals opinion on the "bargain" you're getting before you sign anything or relinquish cash.

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