Real estate scams come in all shapes and sizes. Don't get duped. We wrote this article to shed light on some of the unsavory situations homeowners can find themselves in and to help identify scams. Seller beware.
How can I avoid wire fraud in a real estate transaction?
Wire fraud is a significant problem in the real estate industry, with the National Association of Realtors noting that real estate wire fraud is one of the most prevalent cybercrimes in the U.S. Wire fraud typically goes something like this: Via email, scammers pretend to be with the title company, a real estate agency, closing attorney, or other real estate professional. They provide wire instructions that send money directly into the scammer's bank account — money that may be difficult if not impossible to recover once sent. To avoid falling for this type of wire fraud, never click on unsolicited emails. Be wary of emails that change instructions you've already received from a company. Never send personal information via email, such as your social security number. It's always a good idea to double-check any wire information by making a phone call to the escrow company's office and speaking with your representative prior to making the wire.I've been contacted by a company that says it can lower my home loan payments if I pay an upfront fee.
If you find yourself in a pinch on your mortgage and receive an offer for an incredibly low interest rate or otherwise almost unbelievable deal on a new loan from a "mortgage agency," you may be talking with a scammer. Advance-fee loans, loan flipping, and loan fraud all target homeowners who need a lower monthly mortgage rate to keep their home. They promise discounted loan rates for a high initial fee but often just hang the consumer out to dry. Anytime someone reaches out to you and promises something that seems too good to be true, it may be prudent get more information before sharing confidential information.
Other red flags may include:
Asking for sensitive banking or personal information
Not being willing to provide testimonials
Offering deals no other company is offering
Lack of connection with a traditional bank or well-known real estate company or service provider
If you're in the foreclosure process, scammers will know you're eager for a solution and attempt to leverage that motivation in their favor. Always research companies you do business with online, and never sign anything without reading it carefully and having it vetted by a knowledgeable third party.