Scammer:
noun
scam◦mer | ‘ska-mər
: one who commits or participates in a fraudulent scheme or operation.
~ Merriam-Webster
… Or as our favourite online dictionary’s most “upvoted” definition states, “they are unhindered by sympathy or morals and are the very face of human corruption”.
~ Urban Dictionary
Although hidden, con artists display little to no fear and approach just about anyone, aiming for individuals from all walks of life – both the educated and non-educated.
MultiNET Home Loans offers a range of tips to observe in order to distinguish between a legitimate business deal and a business deal that is used as a front for fraudulent activities, as in the case of fake real estate lawyers or property businesses that are fabricated.
“Advances in technology have created opportunities for bold fraudsters to scam buyers and sellers out of large amounts of money,” MultiNET says, adding that individuals need to acquaint themselves with the methods being employed to scam unsuspecting people out of their hard-earned money.
Common scams
Common real estate scams include the following:
Identity theft
According to MultiNET, common instances are the creation of phony credit accounts. These accounts, over time, accumulate massive debt.
“Everything from houses, luxury vehicles and jewellery.”
This form of fraud can go undetected for months while victims’ debt builds up.
Companies without reputation
In this instance, fake companies spring up overnight. Set up by predatory scammers, this involves pinpointing deserted property. The chosen property will then be exploited for monetary gain.
The goal is primarily to receive commission for suggesting the property to you and showing you around.
“They try to get you to commit without visiting the property personally.”
Fraudsters posing as a buyer
Fraudsters may pose as buyers who are willing to put in an offer. The seller is conned into signing a document that they requested, claiming that the document will help them get their home loan approved.
Additional scams
1. The invisible home
A scam artist creates a fraudulent listing of a property that is yet to hit the market. The aim is to appeal to the individual’s desire for the advertised property so that they pay a deposit.
2. Bogus rentals
This refers to the listing of fake ads depicting properties that are available to rent. Many fall victim to these particular scams since this is a common avenue many approach for affordable housing rentals, as opposed to acquiring the services of an accredited real estate agent.
3. Fake lawyers
Under the pretence of being professional real estate lawyers, these scammers front as representatives of real estate companies. The objective is to collect a fee for the transaction.
4. Loan flipping
This involves active persuasion of homeowners to refinance their mortgages by money lenders. The goal is to urge these property owners to do so continually. The lenders, in return, receive more business.
How to protect yourself
Knowing how to identify these scams can help you avoid unnecessary loss and litigation.
Important things to consider before engaging in business transactions are:
Credibility
Confirm the credibility of entities by doing research at the start of a potential business deal. “When possible, ask for proper paperwork whether they are homeowners, agents, or real estate companies,” MultiNET advises.
In-person amendments
“Changes made regarding payment details must always be done by the seller in person if possible.”
Email hacking is widespread. The scam artist uses this method to engage in monetary exchanges. They transfer cash to their personal bank accounts or online wallets.
Confirm business details
Make sure to validate important business information, such as email addresses and bank account.
Red flags
1. Payment requests
“The faster a scammer gets you to agree to a business deal, the faster they can steal your money and avoid getting caught.”
“Sellers” strategically place pressure on a potential buyer in an attempt push them towards a spontaneous transaction.
2. Insane prices
“If the price looks too good to be true, it probably is.”
Do not fall for alluring prices that are clearly lower than they should be.
3. No viewings
A significant red flag is the refusal of the request to view the property you intend to buy. Viewings are an integral part of decision-making in the world of real estate.
Precautionary actions
To avoid fraudulent business exchanges, take these necessary steps recommended by MultiNET at commencement of the initial interaction.
– Price range knowledge
Research the area of the property you’re interested in and be well-informed about market-related prices.
– Question bargains
Call the estate agency to find out if the deal is for real when spotting a bargain promoted online.
Don’t call the number at the bottom of the ad. Instead, obtain the legitimate number.
– View the property
When an agent disregards a buyer’s request to view the property in question, the chances are good that they don’t have access to the property.
Remember
Do your homework on the property and be especially vigilant when approaching large-scale trades such as property purchases.