Buying or selling a home is a huge milestone in a person’s life. Unfortunately, criminals are increasingly exploiting the real estate market through real estate fraud. The real estate market is filled with potential scams that can cause buyers and sellers significant financial and legal distress. According to research, one in twenty Americans who purchased or sold a home between 2021 and 2023 have fallen victim to real estate fraud. Real estate fraud comes in many forms. Knowing the warning signs can help protect you from falling victim to these deceptive practices. Below are some of the warning signs of real estate fraud you need to watch out for;
One of the clearest signs of real estate fraud is an offer that looks too good to be true. As a buyer, you should be wary of dramatically discounted prices. Scammers usually use this tactic to lure in unsuspecting buyers. If a house is listed well below the market value for the area, be careful, as the listing could be a scam. If the listing is legitimate, you could find that the seller is hiding issues with the property.
On the other hand, as a seller, you should be cautious of people who give you offers significantly higher than your property’s market value. Unreasonably high offers may come with hidden strings attached, such as a buyer requesting unusual payment methods. Do not be easily swayed by a high offer. Fraudsters often give significantly high offers, only for them to later withdraw or manipulate the deal. Take time to verify the legitimacy of an offer before accepting it. A real estate agent or lawyer can help you verify the legitimacy of an offer.
Another red flag to watch out for is suspicious payment requests. Scammers may ask for unconventionally payment methods, such as cryptocurrency, wire transfers, or cash payments. Such payment methods make it hard to trace the transaction. Once payments are made through such means, recovering the money can be difficult or impossible. If you receive a sudden, last-minute change to payment instructions, this could indicate a scam. Before making any payment, always verify payment details.
Fraudsters often use high-pressure tactics to get you to sign documents or transfer funds before you have had an opportunity to do your due diligence. For instance, a seller might try to scare you by telling you that many other buyers are interested in the property and that if you do not act fast, you will not get the property. Do not be rushed into closing a deal. Legitimate real estate transactions take time.
If, for example, a seller cannot verify key information, such as property or ownership details, or avoids sharing documentation, it is a warning sign of potential real estate fraud. Also, be wary of people who refuse to give you their full names, addresses, or contact details.
In conclusion, real estate fraud is a serious problem with potentially lasting effects. Staying alert and recognizing the warning signs can help keep you and your assets safe.
If you need legal help, contact our skilled San Francisco real estate attorney at SAC Attorneys LLP.