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Watch Out for These 4 Real Estate Scams

With the growth of the internet and technology, real estate scams have become prevalent in many parts of the country – including right here in Denver. Understanding what’s real and what’s attempted fraud can keep you and your bank account safe. Here are the top four real estate scams in the country today and some tips for avoiding them.

#1 – Title Fraud

Title fraud occurs when a scammer uses falsified documents to pose as the owner of a home. He or she will forge documents to transfer a property into his or her name, and then take out a mortgage on that property. Once the criminal receives the money, he or she simply leaves the owner of the home with the debt. The best way to prevent this type of fraud – or at least minimize it – is to make sure you have title insurance on your property. This way, you’re covered should the worst happen.

real estate scams#2 – Foreclosure Fraud

While it’s not as common now as it was a decade ago, foreclosure fraud does still occur. In these real estate scams, fraudsters target people who own homes, but who are behind on their payments and facing foreclosure. In most cases, the criminal will offer the homeowner what seems like a legitimate consolidation loan designed to help them avoid foreclosure in exchange for an upfront fee and exchange of the title to the property. However, the criminal keeps all the payments, remortgages the property, and pockets the upfront fee, leaving the homeowner high and dry. To avoid this, be wary of any type of loan that requires upfront payments or a title exchange.

#3 – Online Home Sales

The internet is a valuable tool for buying a home, but it’s important that you take the time to thoroughly evaluate every single situation. One of the biggest real estate scams today involves online home sales. Scammers find homes that are listed for sale and then impersonate real estate agents from the company that has the home listed. They’ll pretend to take paperwork and get loan approvals, and then they’ll take the buyer’s money. Unfortunately, when the buyers go to move in, they find the home already occupied by the real buyer. Avoiding this scam is easy enough; make sure you contact the real estate company yourself regularly.

#4 – Seminars, Courses, and Webinars

Many homeowners (and would-be homeowners) can benefit from legitimate courses, seminars, and webinars that educate them on buying and investing in real estate. While there are certainly several very good speakers and teachers out there, there are others who have only one true intention – getting you to “invest” in a surefire thing that will make you money. In the end, you may find yourself out hundreds of dollars in seminar fees, and if you actually purchase one of these so-called “investment” homes, you may find yourself the owner of a money pit, too. Always do your research on the speaker before purchasing anything.

Real estate scams aren’t as prevalent as they were during the housing market collapse, but they do still exist. The best way to protect yourself is to stay educated and understand the different ways in which fraudsters will attempt to con you out of your money.

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