Fraud News

Shelter From the Sneakiest Real Estate Scams

Scams are a reality of real estate. Whether buying, selling or renting property, here’s what to know about some of the sneakiest schemes:

Closing cons

It starts with hacking the email accounts of real estate agents to steal details about clients and closing dates, often by tricking agents into clicking malware-infected links supposedly sent by a potential client. Scammers then follow with phone calls or other emails — posing as that agent, a title company, real estate attorney or the seller of property that’s slated for settlement — to funnel funds to their bank accounts.

Claiming a “last-minute change,” buyers or other involved parties are given new wiring instructions, sending to scammer-held bank accounts the buyers’ down payments and closing costs, release of money held by title companies for a supposed canceled sale, or sellers’ proceeds. What helps fraudsters: Legitimate transactions often depend on pre-settlement wiring of funds to bank accounts held by title companies, real estate attorneys or others handling the deal.

Defense: Don’t trust email, instead communicating via telephone numbers you already have or can look up yourself. Before wiring funds, make sure that the bank account and routing numbers are for bona fide title companies, attorneys or others after ensuring they’re legit via an online search of unknown firms and the designated contact person.

Rental ripoffs

Rental scams have traditionally targeted prospective tenants. Crooks steal photos and descriptions of properties for sale on real estate websites, or invent their own to advertise bogus rentals on Craigslist and elsewhere. After striking a deal — typically by email or phone — renters are asked for payment up front. When they try to move in, they discover that the rental doesn’t exist, or that the actual owner isn’t renting it. In addition to lost payments, renters risk identity theft from disclosures they have made on fake application forms.

But landlords are increasingly popular targets. Usually, scammers pose as would-be tenants for vacation or permanent rentals, then sending advance checks in amounts greater than the agreed rent or security deposit. Citing a “mix-up” a day or so later, they ask that the difference be returned ASAP. Landlords who oblige lose that money, and later learn the renter’s check was counterfeit.

Defense: Both renters and property owners should run an online search on who they’re dealing with. Google names, contact information, property locations and even chunks of descriptive text from advertisements or responses to ads; if you find duplication elsewhere, assume it’s a scam. Try to deal in person — not solely over the phone or email — and before exchanging money, get copies of driver’s licenses that can be cross-checked with the property ownership records. When booking vacation rentals, pay with a credit card, PayPal or payment transfer services at websites such as VRBO and Airbnb.

Time-share resale schemes

In this classic con, scammers identity time-share owners through public records or lists bought and sold from resort developers, then contact them as “resellers” to say they have an interested buyer or can quickly sell unwanted units. They may set up front “company” websites or even provide false documents to make the potential deal seem legit, sometimes using an associate to pose as the buyer.

All that’s needed: Up-front payment — often by wire transfer — to cover sales commissions and services, closing costs, taxes or other fees. Once the money is sent — usually via wire transfer or a check sent to a post office box or a temporarily rented office space — the resellers vanish, sometimes reopening under a different company name. Some victims are subsequently hit with follow-up fraud — another business (usually run by the same scammers or cohorts) that claims help to recover funds lost in resale rip-offs … with another up-front payment.

Defense: Need more reason to not send up-front payments before services are rendered? (Consider that advance payment is also key to scams promising services for loan modification, foreclosure rescues and other homeownership problems. If you’re serious about selling a time-share, check with your resort about any resale programs it offers, or with trusted, well-known local real estate agents. When listing a time-share yourself, stick with legitimate websites such as RedWeek and TUG (Timeshare Users Group).

For information about other scams, sign up for the Fraud Watch Network. You’ll receive free email alerts with tips and resources to help you spot and avoid identity theft and fraud, and keep tabs of scams and law enforcement alerts in your area at our Scam-Tracking Map.

Photo: Asergieiev/ iStock

Also of Interest