Introduction
With the boom in the real estate industry, real estate
investments have been shooting up rapidly. With an increase in the real estate
investments, scams too are occurring frequently. In this article, DC Fawcett gives guidelines on the various types of scams, how consumers can protect
themselves from scams and the indicators of scams.
Types of scams
Property rented by people with no leasing rights
Those who don’t have leasing rights on their properties rent
them to potential tenants. They then disappear with the first month’s rent,
security deposit and sometimes even the prepaid rent.
Charging future tenants with money for background verification
Prospective tenants are asked to pay money
for background checks. When hundreds and thousands of tenants pay this, a lot
of deposit is accumulated by the scammer.
Copying legal advertisements and posting it with their own details
Scammers often copy legitimate advertisements and post it
with their own contact information. They then make some excuses for not being
able to show the property. The tenants are then convinced to pay without seeing
the property beforehand. Once the scammer gets the money, he vanishes
Fake cheques
Scammers contact the property owners who have
advertised their homes on the internet. They then transact rental prices and
send cheques to the owners. The cheques are written in excess of the actual
rental amount. The scammers demand a refund of the excess amount, saying that
they will back out if they do not get the refund. So the owners pay the refund.
But, the owners find out that the cheques are counterfeit when they deposit it
in the bank.
The crime doer actually shows the buildings to the potential tenants.
In these scams, the scammers are actually show the buildings
to the tenants. Tenants then move in only to be told by the bank that the
property does not belong to the scammer.
Ways to avoid scams
People should be cautious of scams:
Potential tenants
should verify the renter’s personal details like income, track record and
others and follow up closely with the individual
People should never
wire funds to strangers
People should check the
security deposit amount in their state before paying.
People should check
with the county recorder to know who owns the property that they are going to
rent
They should check the
authenticity of the property owner by calling the property manager.
People should ask the
owner for an application. If they fail to produce one, it is a scam.
They should not receive
checks with overpayment.
Conclusion
There are plenty of scams occurring in the realestate industry. For example: This complaint was received by the programming
manager of a non-profit firm which had campaigned for loan modification. A fake
company posing as a government-affiliated housing agency had cheated the
unsuspecting homeowner out of $10,000 promising loan modification. After giving
cash for phony “processing fees”, the victim was left five figures poorer with
no mortgage relief in sight. So people should be careful about scams. The tips
given by DC Fawcett will be of great help.
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