Since I did not have a question this month, I thought I would take an opportunity to provide information about scams related to real estate and rentals. As our market ramps up, we are going to see an influx of scammers, whether it is in our community, or online.
Real estate related scams are mostly going to be targeted towards real estate agents. I have been in several scenarios where a buyer from another country wants to mail an earnest money deposit for a large sum of money on a property he or she “cannot live without”. The contract will of course fail, at which point they will request the funds to be returned to them in the form of non traceable funds, such as Western Union. For sale by owners need to be aware of this, as they will effectively be that real estate agent, and arguably an easier target whereas they are not in the business day to day. We are seeing many owners using marketing tactics which will atract these scammers. Watch for buyers who cannot communicate on the telephone and especially those who reside in other countries.
There are of course other types of real estate scams related to non disclosure of material facts, but not necessarily the type a scam I am talking about today.
On the rental side of things, we can expect even more scams. A couple examples and some things to watch out for:
When searching for any rental (though primarily long-term rentals) be wary of duplicate listings on websites like Craigslist. If you find a property listed at a higher price, and another with the same exact photographs or address, it is likely a scammer duplicating the marketing material to attract a renter, then scamming them into sending a deposit.
Another tactic is finding old or expired real estate listings on marketing sites, copying the information, and listing it as a rental.
In either scenario above, the end result is usually the same. The scammer will ask you to send a deposit for the rental. Be especially careful about providing cashiers checks, as they are about as traceable as cash. A scammer can also cash a personal check.
I was once in a situation where I rented a vacation rental to a family outside the United States, which is not uncommon. They cancelled the reservation and asked what the cancellation fee was. I can’t remember the amount, but they were okay with it. They asked me to wire the money rather than mailing a check Since they were out of the country. Two weeks later, the cashier’s check they used to pay for the rental bounced, it was never a real check in the first place. In this example, rental owners are also an easy target for scammers, this is probably the most common type of rental scam.
Watch out for listings that are too good to be true, and again be careful of those who will not communicate over the phone. When dealing with vacation rentals, credit card transactions are always the safest bet in my opinion. As a final bit of advice, look to local resources for advice. If someone represents that they are the owner of a home, confirm with the county courthouse that they actually own the home if it is suspicious. Depending on what type of service you are working with, local real estate agents and property managers are also a good resource for advice. I recently was contacted by a woman who was on her way to the rental she had paid a deposit for. She said it seemed suspicious. I helped her to determine that the person she was dealing with was not even the owner of the home, and was able to save her about a thousand bucks, and a whole lot of travel time.