Thursday, September 29, 2011

Tips to Avoid Real Estate Scams

While we hopefully all know to avoid e-mails asking for money to release funds held in Nigerian, scam artists are trying new routes, both on and offline.

Avoid Anything Overseas
I ran into this one myself and actually followed along for an e-mail or two.  We were looking for a new rental; both apartments and houses for rent.  A seemingly normal Craigslist posting offered to rent a nice house for a low rate, but not astonishingly low rate.

I thought to myself, "well, this is possible, perhaps someone is downsizing or moving and looking for help with the mortgage payment for a few months".  I looked up the address on Zillow and saw that the house was also for sale.

I e-mailed the poster and got a response asking for more information about myself including when I'd like to move in and other basic questions.  To this point, the only red flag in my mind was that the asking rental price was low.

The next e-mail I received was a dead give-away.  Poorly written, several woe is me stories about the missionary work this person was currently doing overseas in Africa, and then a request to submit a full application.  The e-mail also said that upon receipt of my deposit, we'd be sent the keys.  I didn't respond.

Flash forward to a few months ago.  I mentioned this to our Realtor.  He said this was a growing scam.  Anyone can see which houses are for sale and possibly vacant.  They can copy the pictures from the listing to make it seem like they do live there.

Another Realtor in his office had driven past a home he was selling and saw moving trucks.  He stopped the people and asked what was going on.  They explained how they were renting the house and so forth.  He had the unfortunate task of informing these people they had been scammed and that the house was not for rent.  They had to put their belongings back in the moving truck.

Go Straight to the Source
This might not apply to many people, but this was a frustration I ran into when I was renting in NYC.  I found a post about an apartment on Craigslist.  It sounded nice and the broker said there would be no fees.  I actually knew the housing complex.

While it wasn't really a "scam", I met the broker on the street corner and he walked 25 yards with me to the leasing office.  The leasing agent for the complex handled the rest of the process.  I found out at the end that new renters either got $500 off, or $250 off and $250 to whomever referred them.  Apparently this broker (and others) were making $250 a pop for the 25 yard walk.

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