Are The “Best Real Estate Solutions” Really Up to The Mark: 3 Scams To Remain Abreast of
Buying, selling, and owning real estate includes homes that are often the most expensive transactions most individuals undertake in their lives. Around hundreds and thousands of dollars can be involved, attracting dishonest tricksters and fraudulent scammers to take advantage of those involved.
This is why you need only the best real estate solution to avoid being scammed or mislead. It’s human nature to make the most out of any transaction. Generally, people only trust those with who they are working, which should always be the case.
There are various reasons why real estate scams are successful. It’s because the real estate agents use jargons that automatically put most home buyers and sellers at a disadvantage. If someone does not fully understand terms like a mortgage, reverse, security deposit, contingency, escrow, etc., this leads to confusion and ends up being taken advantage of.
Today, let’s list down common real estate scams so that you can stay aware of these the next time you are performing a transaction
Avoid these scams to get the best real estate solution for yourself
The wire transfer scam
This scam is currently growing and is an extremely costly one. In this fraud area, buyers are defrauded out of tens of thousands of dollars in down-payment funds. This is a dangerous scam which is also effective for several reasons.
For one, the scam appears legitimate because emails are used to cheat buyers for a large sum of money. This all starts when the wire transfer scammer gains access to the vendors involved in the closing of the property trade.
The vendor can be the home vendor’s company, real estate agency, or lender. The scammer may not even need to gain access to their computers. They will require some knowledge about the employees who work there, such as the names, email addresses, and titles.
Once the scammer knows about those involved in the upcoming closing, they generate an email with wiring instructions about the down payment. The fraud email will look like it’s coming from the home buyer, the title company, the lender, or even the real estate agent.
They will make it seem like they are the best real estate solution through email spoofing. This concept forges the email header so that the message looks like it came from an authentic source. Since emails look as if they are coming from a legitimate source, home buyers will continuously follow the fraud instructions. They will then transfer the money to the scammers based on the instructions in the email.
By the time the involved party realizes that they have been scammer, both the funds and the scammer are gone.
Real Estate predatory loans are the ones that have an unfair and abusive loan term placed on the borrower. Predatory loans often use deception to convince the borrower to take out the loans that the borrower does not want.
In other cases, predatory loans are the ones that invoke coercive and unscrupulous practices to get the borrower to opt for a loan. Common characteristics about these loans are that they often have very high-interest rates, other fees, and rigid terms.
The challenge is noticing that lending is not always illegal. A borrower’s ability to get a mortgage at a market rate depends on several factors, like borrower credit rating, income history, loan-to-value ratio, down payment amount.
For borrowers with a damaged credit history who do not have a down payment option, “risk-based” loans are the most accessible pathways to homeownership. This said, none of the best real estate solution companies would ever impose any unfair penalties included with the loan.
There are also specific characteristics to watch out for with these kinds of loans. For starters, a lender can guarantee approval for anyone. The borrowers often rush the signing of loan papers, as real estate transactions can often be all about timing and action.
Some predatory loans even have life insurance coverage included that makes the loan prepayment fees and other unfair penalties a part of the loan. Yet, in most cases, the biggest factor for predatory lending is the high-interest rates and the loan fees.
Becoming a victim of these loans can put you into deep debt that severely damages your credit rating.
House inspection scam
Home inspections are quite valuable for the homeowners as they can help them determine any hidden and unseen problems in their homes. However, their value will be minimal if the home inspector is a scammer who does not conduct proper inspection.
Meaning, the inspector is just in for making a quick buck for themselves. Like most scams, home inspection scam is rooted in the lack of integrity for home buyers. Arm yourself with enough knowledge about your home, and you will save yourself from such frauds.
What you certainly should do, as a homeowner, is to determine the difference between a cursory visual inspection and a full detailed inspection. Inquire about things from your inspector, ask about their experience, perform background checks before hiring them.
Alternatively, you can hire someone from the best real estate solutions company to perform a professional inspection. What’s more, is real estate agents will usually recommend that you employ several home inspectors. You will then get a broader picture and valuable knowledge about your home and, ultimately, save yourself from this fraud.
All these scams leave the question, “Are top real estate companies up to the mark?” Well, yes, they are. The best real estate solutions providers are legitimate because of their licenses and legal backing. Always prefer hiring a renowned agency, and do not let your budget be the only reason for a real estate-based decision. So,
How will you be avoiding these scams?
- March 10, 2021