Even savvy homeowners can fall for an equally savvy scam-artist!
A Couple of Current Scams:
Buying a home is one of the most stressful experiences out there—in fact, nearly 70% of people who have bought or sold a house report finding it more stressful than having a baby, changing jobs, or getting married, according to a survey. And why not? After all, this is the largest purchase that most of us will ever make, and a huge chunk of your life savings are on the line. Of course, all that cash is likely to attract some shady characters hoping and even plotting for ways to take advantage of you. And all that stress could just cause you to ignore warning signs.
Having a savvy real estate agent at your side can help reduce the chances you’ll fall prey to one of these real estate scams. But you should also know for yourself the dangers that lie out there for unwary home buyers—and how to outwit them.
Real estate scam No. 1: You transfer
funds to a fraudster
You’ve done your shopping, you’ve made your offer; and it’s time to put your money where your mouth is. At least you think that’s what you’re doing, but when you respond to an emailed request to send money to this account or that person, it winds up someplace else—perhaps someplace far, far away.
Outwit it: "Cybercrime can hit any industry, and real estate is no exception", says Amy Mizner, principal of Boston-based Benoit Mizner Simon & Co. Real Estate. She recommends that buyers only respond to a verbal request for a wire transfer, rather than an email, and that they always consult their agent when proceeding with any step in the transaction.
Real estate scam No. 2: ‘I’ll sell your
home or buy it myself’
This is a bait-and-switch gimmick that many less-than-scrupulous real estate agents use to get new clients.
"This is simply a tactic to win appointments", says Ryan Hoffman, real estate broker at Leverage Real Estate in Albany, NY. These programs come wrapped up in a bundle of stipulations that most homeowners would never agree to, such as a required asking price determined by the agent, pre-determined price drops every 30 days, a requirement to buy a new home through this agent, and possibly only from homes listed with their firm. The agent’s offer price to buy the home if it doesn’t sell is typically well below market value.
“When home sellers realize they would never agree to these terms, the agent switches the tone to, ‘OK, fine, let’s just list the home the standard way,’” Hoffman says.
Outwit it: “If it sounds too good to be true…” Well, you know how that phrase ends. However, if you do fall prey to the sales shtick, and the terms don’t meet your approval, just don’t sign up this person as a listing agent. Got it?