Ever wondered how safe your real estate investments truly are? Scammers are getting cleverer by the day, exploiting unsuspecting victims. Here’s a rundown on some of the top tricks they’re pulling off.
1. Dual Contract Scheme
This scam involves two contracts: one with a lower price shown to the lender, and another with a higher price for the buyer. It’s a dirty trick to deceive both the lender and you, leaving you in financial turmoil.
2. Rental Rip-Offs
Beware of rental listings that steal photos from legitimate sites. Scammers create fake listings to lure you into paying deposits for properties they don’t even own. Always verify before you wire any money.
3. Foreclosure Relief Frauds
Scammers target homeowners struggling with mortgages, promising to secure loan modifications for a fee but fail to deliver. They take your money and run, leaving you in a worse state than before.
4. Title Washing
This scam involves falsifying documents to hide significant problems like liens from new buyers. Unsuspecting buyers think they’re getting a clean title, only to find a mountain of legal problems.
5. Loan Flipping
Predatory lenders refinance your loans repeatedly, charging high fees each time. It’s a cycle that benefits them while draining your equity, trapping you in endless debt.
6. Bait-and-Switch Loans
You apply for a mortgage with agreeable terms, but at the last minute, the lender switches to an agreement with much worse conditions. Under time pressure, many buyers unwittingly sign these predatory contracts.
7. Escrow Wire Fraud
Scammers posing as real estate agents or title company representatives instruct you to wire closing funds to them. Always confirm where your money is going directly with known and trusted contacts.
8. Land Banking Scams
In this scheme, companies promise high returns on undeveloped land, claiming it will skyrocket in value. Most times, these plots are virtually worthless, and the returns are nonexistent.
9. Property Tax Scam
Scammers send official-looking letters offering to retrieve your overpaid property taxes for a fee. In reality, they pocket the fee and disappear, leaving you with less than you started with.
10. Timeshare Reselling Cons
Here, you’re contacted by someone claiming they have a buyer for your timeshare; all they need is an upfront fee to proceed. Once paid, both the supposed buyer and the fee vanish.
11. Fake Real Estate Lawyers
These fraudsters pose as lawyers, claiming they’re necessary for closing deals, often in urgent situations. They disappear once your payment clears.
12. Overpayment Scams
This involves a buyer who sends you a check for more than the purchase price and asks for the difference back. The check eventually bounces, and you’re out of pocket for the amount returned.
13. Investment Seminars
Be wary of seminars that promise foolproof real estate investment strategies for a hefty entry fee. They make their money from your attendance, not from successful investing strategies.
14. House Stealing
Scammers forge your identity, claim ownership of your property, and sell it without your knowledge. Regular checks on your property status can prevent this nightmare.
15. Off-Plan Scams
Investors are shown plans for beautiful developments, encouraged to invest before construction. Too often, these projects never materialize, and your funds are lost.
16. Home Improvement Cons
After natural disasters, scammers posing as contractors offer quick, cheap repairs, taking your money without completing any work, or use substandard materials that cost you more in the long run.
17. Mortgage Elimination
Scammers claim they can legally eliminate your mortgage, for a fee. Unfortunately, their methods are bogus, and you’re left with less money and the same mortgage.
18. Chunking
This involves a scammer using your identity to buy properties, then defaulting on the loans. Your credit takes a hit, and you’re left dealing with the fallout.
19. The Straw Buyer Scam
In this scenario, someone is convinced to purchase a property on behalf of another. The real buyer defaults, leaving the straw buyer legally responsible.
20. Equity Skimming
A buyer uses a straw buyer, secures a mortgage, then rents out the property without paying the mortgage. When the bank forecloses, the renter is evicted, and the scammer pockets all the prior payments.
Watch Out!
These scams can hit anyone, and the best protection is knowledge and vigilance. Don’t let a sweet talker trick you out of your hard-earned money. Verify everything, trust your gut, and keep your investments safe!
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The post – 20 Outrageous Real Estate Scams Happening Right Now – first appeared on Career Step Up.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
