Real estate scams are crimes that consist of deceiving a person in the context of a transaction related to real estate with the aim of obtaining an illegal economic benefit. Real estate scams can involve the sale, rental, or financing of a property and can include falsifying documents, using false identities, deception, and manipulating information for fraudulent financial gain. Real estate scammers often take advantage of their victims’ lack of knowledge or experience to commit fraud. Real estate scams can have serious consequences, including property loss, financial bankruptcy, or reputational damage.
Real estate scams
To avoid falling for real estate scams, it’s important to thoroughly research the people and companies you’re doing business with, verify ownership documentation, and not make advance payments without first receiving the property or a document guaranteeing it.
10 types of real estate scam
Property sales Scam:
A scammer offers to sell a property for a very low price and asks for a deposit or advance payment to secure the sale. Once the scammer receives the money, he disappears without handing over the property.
Property rental Fraud:
The scammer pretends to be the owner of a property and collects money from people who want to rent it. Once the victim pays, the scammer disappears without handing over the keys to the property.
Foreclosure Scam:
The scam artist poses as a lawyer or legal representative and offers to help a person who is about to lose their home to foreclosure. The scammer asks the victim to pay him an amount of money to “stop” the foreclosure, but the scammer actually does nothing to stop the foreclosure and disappears with the money.
Mortgage Loan Fraud:
The scammer offers a home loan to people with financial problems or bad credit. The scammer requests a down payment to process the loan, but after receiving the payment, disappears without granting the loan.
Vacation Home Scam:
The scam artist offers an attractive vacation property at very low prices. The scammer requests a down payment to reserve the property, but after receiving the payment, disappears without delivering the vacation property.
Real Estate Investment Scam:
The scammer offers attractive real estate investment opportunities with high returns. The scammer requests an initial payment to process the investment, but after receiving the payment, disappears without making the investment or delivering the promised returns.
False Title Deed Fraud:
The con artist sells a property using a false or altered title deed. The victim buys the property and pays the agreed price, but later discovers that the title is false and loses the property.
Lease-to-Purchase Scam:
The scammer offers a lease-to-own agreement in which the victim pays an amount of money up front for the option to purchase the property later. The scammer breaks the contract and disappears with the money.
False Property Appraisal Scam:
The scammer inflates the value of a property by using a false appraisal in order to obtain a larger mortgage loan. The victim accepts the loan and pays the monthly payments, but later discovers that the property is not worth what he was told and that he has been the victim of fraud.
Construction Contract Fraud:
The scammer offers construction services and requests a down payment to begin work. Once you get paid, you disappear without doing the work or completing the project as agreed.
Buying an off-plan apartment
This is a complex case that requires detailed analysis and a lot of validation. If there is any risk, it is not worth betting on your life savings. You have to check everything. It is obvious that having to check many details makes it more likely that one can be deceived or simply that the promises are not fulfilled. Some of the risks are:
- The work is not finished due to bankruptcy.
- Rise in manufacturing costs in inflationary periods
- There is no guarantee or insurance that guarantees the amounts contributed. The plot is not free of charges
- The plot is subject to legal proceedings
- The plot has urban problems that are only accessible to experts
- Ownership of the land belongs to someone else
- A property is being sold that is not being built
Buying an existing apartment
In the case of buying an existing home, everything is simplified: the farm is bought and raised, the finishes can be checked, and the price is true and risk-free. Change of money for a finished and verifiable good. Some of the risks of buying a finished home are:
- Unreported hidden charges
- The existence of several headlines.
- One of the owners refuses to sell.
- Previous mortgages or foreclosures
- Debts with the administration previously acquired.
- The existence of an unreported lease.
The owner—is he really the owner?
The fastest and most effective way to verify a real estate scam is by going to the Property Registry, where you can obtain proof of the existence and real ownership of the properties. It is important to verify that the amount contributed to the account has been deposited in a guaranteed bank account. This is the only way to guarantee its return in the event that the operation does not materialize.
Accommodation is too cheap to be true.
We must analyze the price of the place, and the price offer must be reasonable. The scams for sale seek to offer homes at excellent prices to attract and create an environment of trust.
In these cases, when the merchant asks for a discount for the purchase, it is granted relatively easily, or some premise is granted in exchange for the signature of the erras, which will be the money that will be taken from you.
Money on account: how to guarantee the deposit
The earnest money can be deposited before a third party who acts as a judge in compliance with the main contract as the best way to guarantee recovery in the event that the seller fails to comply with his part. We recognize that it is not the custom, but it must be said that it is the most prudent thing to do.
In any case, a good way to avoid being a victim of fraud is to manage the purchase, sale, or rental of the home through a real estate agency that validates the entire process and shows you a sample of the validations carried out.
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