Buying real estate is without a doubt one of the most important and expensive decisions in a person’s lifetime. Owning a home is a special achievement for many people, and also the place where they spend a lot of time with loved ones. Owning and buying real estate also poses a risk for real estate scams if you aren’t sure what to look for. Some common scams include wire fraud, foreclosure relief scams, loan flipping fraudsters, home inspection scams, and more. Keep reading below to learn about 3 of the most common real estate scams so you can stay safe and know how to avoid them.
Escrow Wire Fraud
To start with, escrow wire fraud is one of the most common real estate scams. Scams contact homebuyers pretending to work for the title or escrow company involved in the home purchase. Then, they will then provide instructions on where to wire escrow funds. However, fraudsters will set up fake websites that appear similar to the title or lending company you’re working with and victims will wire the funds as directed. However, by the time they realize they have been scammed, the money has been withdrawn or moved to another account. To stay safe, always confirm wire instructions with a live person from a phone number that you’ve verified. In addition, always be extremely cautious if you receive a request to change wiring instructions that you already have. Lastly, always confirm the escrow account number before wiring money, and verify the transfer with your settlement agent immediately after sending funds.
Loan Flipping Scams
Next, Loan Flipping scams occurs when a predatory lender tries to convince a homeowner to refinance their mortgage numerous times, often borrowing more money each time. The scammer will charge high fees and points for each transaction, and homeowners end up with higher loan payments they can’t afford because they borrowed against most of their home’s equity. Sadly, older homeowners and seniors with memory impairment are especially vulnerable because they have a significant amount of home equity and may realize they’re being taken advantage of. As a general rule, if you’ve recently completed a mortgage refinance, it’s rarely a good idea to do another transaction right away. Also, if predatory lenders are actively seeking you out and you have not solicited their help, that’s another red flag to watch for. Only work only with known banks or lenders, and always question any fees and penalties related to the transaction.
Bait-and-Switch Movers
Lastly, another common real estate scam is related to moving your property into your new home. Bait and Switch mover scams occur when an individual fills out a form to request a moving company estimate for moving all your belongings to your new home and you receive an estimate for a certain amount. Later, when the company shows up, they tell you it’s actually going to be much more expensive than the original quote. Sometimes, the company will even pack up your stuff before then tell you the amount due will be much higher than originally quoted. Other moving company scams occur when they take a deposit to secure your move, and then do not show up to provide a service. To make sure you are working with a reputable company, always ask the moving company for their license number, and see if any complaints are registered with local authorities, and check for information on the Better Business Bureau as well. In general, the BBB also recommends getting 3 in-person or virtual quotes from different companies so you can compare costs.
We hope this article has helped you learn more about some of the most common real estate scams, and how to avoid them. Also, it’s very important to make sure you report any scams to the appropriate authorities. That way, you can help stop the scammers from making a victim out of other people in the future. If you believe you’re being targeted by a scammer, it’s important to take steps to notify the proper authorities and file any reports as needed.
About Lemuria Real Estate
Ideally situated on Puerto Vallarta’s exclusive South Shore, Lemuria Residences is a new luxury condominium complex that belongs to a Master planned community designed by the prestigious Gensler Global Architecture firm. The ecologically planned themed property includes more than 1700 acres of preserved Sierra Madre jungle with stunning views of the mountains and Banderas Bay. The outstanding onsite amenities include multiple pools, BBQ areas, restaurants, a 2000 square meter spa, Sports Club, gym, tennis courts, pickleball courts, organic herb garden, and yoga spaces. There are also freshwater rivers and private hiking trails located nearby so it’s the ideal place to invest if you want to be close to nature. Contact Lemuria Residences today to learn more about our luxury beachfront condominiums for sale in Puerto Vallarta.