Common Real Estate Scams and How to Protect Yourself Legally
With real estate transactions involving large amounts of money, it’s no surprise that many people are trying to defraud buyers. Even if you are buying, selling or renting a property, you must be aware of the frauds going to save yourself from the financial loss and legal troubles. Here are some of the most common real estate scams as well as protection under law that you need to know.
1. Title Fraud
Title fraud occurs when someone steals the identity of a homeowner and transfers their property to another person’s name. Then they borrow money against your home or sell it without ever telling you.
How to Protect Yourself:
- Check your title periodically to ensure that it has not been tampered with.
- Purchase title insurance coverage as a precaution against fraudulent claims.
- Do not provide personal information, especially on the Internet.
2. Mortgage Fraud
Mortgage fraud can take many forms, from phony appraisals to stunts like submitting forgeries of third-party work records, or outright identity theft. In some cases, tricksters get the buyer to sign mortgage papers that they later don’t understand.
How to Protect Yourself:
- Always have a trusted real estate lawyer to review mortgage papers.
- Make sure to verify the identity of anyone involved in financial transactions.
- Report any loan offers that look suspicious because they seem to good to be true.
3. Rental Scams
Scammers may pose as landlords, advertising properties that they don’t actually own. They request deposits or rent upfront and disappear once the payment is made. This is especially common with online rental listings.
How to Protect Yourself:
- Visit the property in person before making any payments.
- Demand a signed lease agreement and verify the landlord’s ownership.
- Be cautious of landlords who rush transactions or refuse to meet in person.
4. Fake Real Estate Listings
Some of these types of scams include people pretending to be the landlords of homes. They will ask for money in advance under the pretext that you are borrowing or depositing money, and once your payment has been made they disappear.
How to Protect Yourself:
- Research the property’s ownership through official land registry records.
- Avoid making payments before verifying the legitimacy of the seller.
- Hire a real estate lawyer to oversee the transaction.
5. Foreclosure and Distressed Property Scams
People who are about to lose their houses to foreclosure have become prime targets for scam artists. They guarantee to “save” the property in return for a fee, but in fact either take ownership of it or strip away any remaining equity.
How to Protect Yourself:
- Never sign documents without legal review, especially if under financial stress.
- Consult a real estate lawyer for legitimate foreclosure assistance.
- Be cautious of unsolicited offers claiming to “fix” foreclosure issues.
Conclusion
Real estate scams can lead to severe financial and legal consequences. By staying informed and working with trusted professionals like real estate lawyers, you can safeguard your investments. If you’re buying, selling, or renting a property, Kalia Law Firm can provide expert legal guidance to protect your interests and ensure a secure transaction.