Real estate scams have existed since the dawn of time. But with the troubled economy of the last few years, they have become even more common. People across the country are being targeted by experienced scam artists and losing thousands of dollars. As a public service, we want to talk to you about the most common real estate scams, so you can make sure you avoid becoming a scam victim.
• Common Scam #1 – Bogus seminars. Under this scam, someone offers you a free gift in exchange for attending a real estate seminar. It sounds like a great deal, but when you get to the seminar you find out that you get the gift you have to pay for more seminars. These seminars rarely give you valuable information, and often end up costing much more than the gift you end up getting.
• Common Scam #2 – Empty house renting. Under this scam, someone will find out that a house is going to be empty for a period of time – often when the homeowners are away for work for six to 12 months. They'll break in, change the locks, and then rent the home to you – taking both a deposit and rent money from you, until the day the homeowner shows up and asks you what you are doing in their home.
• Common Scam #3 – Foreclosed home renting. Sometimes a homeowner will know that the house is going to be foreclosed on in a few months. So, to get some extra cash they will put the home on the market as a rental property. You'll give them a deposit and pay them rent for a couple months – at which point the sheriffs will show up to foreclose on the home and evict you without notice.
• Common Scam #4 – Renting homes that are for sale. If a real estate broker knows that an out-of-state owner is trying to sell their investment property, they may put the home up for rent while they try to sell it. They'll collect a deposit and rent from you, and then when they sell the house to another out-of-state investor, you'll be evicted without notice.
• Common Scam #4 – Online rental scam. This is a new scam of the Internet age. Someone will put up a home for rent on Online, even though they don't own the home. They will claim they have left the country for military service or the Peace Corps. They'll then ask you to Transfer them the deposit on the home and say that they'll mail you the keys. You'll send them the deposit money, and then never hear from them again.
You can avoid most of these scams by doing basic research. Google the name of the person who has offered to rent you a home. Check public records to make sure the home isn't for sale or in foreclosure and to make sure the person trying to rent to you actually owns the home in the first place.