Real Estate Scams: Buying a HouseJune 11, 2017
Buying a home is a stressful experience! It’s the largest purchase that most of us will ever make, usually with a huge chunk of our life savings on the line. If you’re shopping in a “hot” market, the additional pressure of making quick decisions adds not just a layer of stress, but the possibility of not taking the time to triple-check every step along the way. To top all this off, the process can be fraught with bad actors. So you need to arm yourself with the knowledge to help you handle the purchase process wisely and safely. Here are some common real estate scams targeting home buyers and some ways to avoid them.
The Fund Transfer Two-Step
You’ve shopped, you’ve made an offer, it’s been accepted, and now 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. Escrow transfers are often a rushed step after a bit of a wait so that urgency can make you act without thinking first.
To avoid this scam, first, stop to take a breath, and only respond to a verbal or in-person request for a wire transfer, never to an email or text, and always consult with your real estate agent when proceeding with any step in the transaction.
Household Goods Kidnapping
You’ve bought the house of your dreams and you’re ready to go. But since you don’t have much time to research moving companies, and moving is expensive, you hire the cheapest one that looks legit. Unfortunately, after driving off with your stuff, the movers decide that they’d like to be paid a little more for their trouble, and hold your belongings hostage until you pay much more than they originally quoted. It’s essentially ransom.
This scam is so common that it’s listed on a U.S. Department of Transportation site. Make sure that your mover is registered and insured and that you have a written estimate. Your best bet is to have a representative from the moving company check out your stuff in person before drawing up the estimate.
More Safety Tips for Buyers
Many of the people running these scams are skilled and very persuasive, which makes it difficult to distinguish the good guys from the bad guys. Here are a few more ways to avoid becoming a victim.
- Work with an experienced, reputable real estate professional.
- Never let anyone pressure you into signing anything.
- Trust but verify, and pay attention to your instincts. If you receive a communication that seems off, such as an unexpected request from a bank or mortgage broker, verify it with the institution.
And then there’s the oldest and best advice about any transaction: don’t let your excitement get in the way of your judgment. If a deal seems too good to be true, it probably is.