When you’re buying a home, the last thing you want to think about is criminals and scammers. Unfortunately, as a homebuyer, you are a major (and often easy) target for criminal types. With thousands of unwitting victims every year, it is a lucrative business for crooks.
Maybe homebuyers should be afraid. Be very afraid. But perhaps it’s better to say, “Be aware.” Be vigilant. Be cautious.
Here are the five most common rip-offs I’ve heard about in the past year.
Email Hacking and Wire Fraud. This increasingly common scam traps homebuyers into sending the funds for their closing to a fraudulent account. The emailed directions for sending funds typically looks like it came from the title company, bank, attorney or Realtor. These emails look and seem very legitimate. These hackers are pros who know how to find real estate related emails and lay in wait for the right time to swoop in.
As soon as the funds are sent to the scammer’s account, they are transferred to an offshore account and are gone. Any time a buyer is sent wiring instructions (or new instructions for funding), they should pick up the phone and call the title company using the phone number from the very first email they received. Or just get a cashier’s check and bring it to closing.
Fraud/Forgery. A little riskier than the easy online theft, this is popular with criminals. Many of these types of cons are seen in For Sale By Owner scenarios or when a property is being ‘flipped’. Here the alleged seller is trying to sell a property they don’t outright own. They could be stealing the true owner’s identity, forging documents, or filing a false deed. Or the fake seller could actually be the tenant posing as an owner.
In another scam, the seller tries to sell the same property to two different buyers at the same time. I’ve heard all kinds of versions of real estate fraud. Someone ends up getting ripped-off. This is why you need title insurance. Working with a title company helps protect against paying for a property that you don’t end up owning.
Mail Solicitations. Buyers often fall for the official looking letters that flood their mailbox after buying a home. For a fee, lots of swindlers will gladly supply you with a worthless copy of your deed or sell you unnecessary mortgage insurance. Filing your homestead exemption is free and you don’t need to pay anyone else to do it.
Postcard notices of awaiting packages are another ploy to get your money or information for other scams. Any notices that look like they come from your bank should be verified with your lender and not by calling the number in the solicitation.
Sketchy Movers. Most moving companies are reputable. But there are some deceitful ones too. Theft, uninsured damage and worse can happen. Some rip-off companies change their name frequently and are hard to track. They may add on extra fees on moving day or require a deposit upfront and then disappear.
Always get references and a detailed written quote in advance. Once it’s moving day and they have your stuff on their van, it’s not the time to negotiate with your things held hostage.
Home Improvement/Repair Scams. This type of rip-off is so common and prolific that I can’t begin to describe them all. But it applies to anyone who rings your doorbell or solicits your business by phone. They will either take your money and disappear or the work will be substandard. If you are foolish enough to let them into your home, be prepared to be swindled or robbed. Trust your gut and get referrals.
While there are many ways to report scams, I have yet to hear of anyone getting their money back after falling victim. Next week, we’ll feature scams aimed at real estate sellers.
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.
Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Carlisle Title, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.