Did you know that the demand for real estate is rapidly increasing as the population grows, resulting in thousands of people looking for a property everyday? Whether you’re purchasing your first property or have previously purchased a home, you run the danger of falling prey to shady or fraudulent real estate activities. Real estate fraud schemes can cause buyers to lose their homes as well as bankruptcy, credit damage and legal expenditures.
Real Estate Fraud Schemes
Avoid the following fraud schemes by reviewing the following methods of deception;
- False elicitation technique; The agent in charge of organizing property sales and purchases has a tendency to side with the seller in order to dupe the buyer into taking out a mortgage. While acting as an agent, he persuades an unwary buyer to purchase a home. The fraudster collects the buyer’s personal information to acquire a loan but sends this information to several other lenders and for different properties, without the buyer’s knowledge or consent.
- Ignorance/ Individual negligence; Ignorance is a major factor in people falling prey to property fraud schemes. An individual posing as an agent visits another individual who has a loan secured by his property. With the help of forged documents and signatures, the fraudulent agent earns the faith of the individual and gets his commission for allegedly relieving the holder from debt.
- Failure to investigate authenticity of property ownership; When real estate businesses neglect to investigate the validity of a property’s ownership, they become victims of fraud. A fraudster can use this to locate an abandoned building or property and in some situations, a deceased person’s property. He secures a mortgage loan by faking the property’s deed of title and then keeps the loan money for himself.
- Rental scam; The most popular sort of property fraud schemes is a rental scam. A person uses images from a legitimate real estate company to create an advertisement on social media in order to seduce naïve tenants. Scammers who have no ties to the property or its owner will ask for a deposit to allow you to inspect it. In truth, they’re only interested in making a quick profit using unscrupulous methods.
Do not risk your money; contact the DWELLYS team if you suspect you are a victim of a property fraud scheme. Our extensive experience and thorough approach to each case will ensure you do not fall victim to any potential fraud. Keep an eye out for our next blog post, where we’ll go over more property scams.