Real estate looked like a risky investment during the subprime mortgage crisis between 2007 and 2009, but it’s made a comeback. No one can deny it remains one of the smartest investment decisions you can make. Still, those who buy property need to look out for the many scams that exist that can turn a smart way to build wealth into a fast way to lose it. Keep reading for descriptions of a few of the most common real estate investment scams that you definitely want to avoid.
Fake Property Owners
It’s pretty simple for someone to pretend that they own property you’re thinking about buying unless you ask them to prove it. It’s shocking that this is the number one real estate scam, but many buyers who are anxious to become property owners engage in conversations with people who claim to be sellers without asking for proof. Getting proof requires that you obtain records available in the courts of the town where the property is located. Sometimes a local realtor can assist. Dealing with bureaucracy may be nerve-wracking, but it’s a lot better than having your life savings stolen by a con artist.
Properties Not On the Market
Imagine seeing a picture of the house of your dreams, but when you contact the realtor advertising it, you find out it’s been sold. Would you cut and run or fall for being taken to other properties that are far more expensive and less attractive? It sounds so obviously shady, but lots of house hunters allow themselves to be strung along by manipulative agents who dangle bait in the form of fake ads at them.
While it sounds like something easy enough to detect and run away from, realtors who engage in this practice tend to have aggressive sales pitches. Be firm. Beware real estate scams. Don’t agree to see property other than what’s being advertised.
Falsely Advertised Exclusive Listings
Ask for proof from the realtor that the listing you’re interested in is only being shown by them. If they’re unable to prove that they have a contract with the seller that states this, it’s a red flag that they engage in other unscrupulous practices.
While this can be out of error, many realtors list properties as cheaper than they really are for all the obvious reasons. Undermarket homes are any investor’s dream, but do the necessary research regarding the value of the home you’re interested in buying to make sure you’re not being scammed.
The stock market seems irresistible with the many TV channels dedicated to advising you on how to create a winning portfolio, but real estate is a lot less volatile. Your property is never going to be worthless as a result of an instant crash. Do your homework, however. Make sure you know who you’re negotiating with and have an attorney on board to oversee the signing of papers involved in real estate transactions. Being extra careful may take more time and money but will be worth it in the long run.
If you’re needing to sell your home, make sure you check out our seller FAQs! We know you’re going to learn a lot to use as you’re searching for a buyer. Also take a look at some of the other home articles we have!
- Duvora | Top 10 Dirty Tricks Used by Real Estate Agents
- Real Estate Elevated | How Real Estate Investors Can Protect Themselves From Scams
- Weetas Blog | The 7 most notorious real estate scams : how to identify and avoid?
- Debt Reduction Services | How to Buy a Home