Don’t Get Hosed by Real Estate Scams
Are you in the market for a new home to rent? Or, are you a landlord looking for your next tenant? If you answered yes to either, this blog is for you!
Rental scams are a growing problem in today’s real estate market nationwide, primarily in transactions where a licensed real estate agent isn’t utilized to validate the property listing. Here are the most common examples of this type of fraud you need to be aware of and how you can protect yourself.
Problem: Online classified ads are heavily utilized by real estate scammers. Typically, they will create a listing for a property at random, whether it’s known to be vacant or even a recently rented/sold property, or they will all-together copy another person’s legitimate posting of a property. In either case, since the property was recently/is still active, the scammer has access to images of the home and the address. The scammer will post an advertisement of the home but claim to be out of state (or country) and unable to meet the potential tenants in person to show the property. Once contact is made over email and lease is signed, the scammer (aka the “landlord”) directs the tenants to wire money, after which keys to the property will be mailed. Only, the keys never arrive.
Solution: Consider using a licensed real estate agent to ensure you have access to legitimate property listings. An agent can also help you review a lease prior to signing it so you can ensure you are protected. If you chose not to use an agent, prior to committing to a lease you will want to check with the county clerk where the property is located. This way, you can ensure the person you are talking to is indeed the property owner.
Problem: A second type of real estate fraud incorporates the use of fraudulent checks where the potential tenant is the scammer. A check for the agreed upon amount, sometimes more, is sent to the landlord with instructions to send a check back to the tenant for the overpayment. Or, once the check has been cashed, the tenant will cancel the agreement and ask the landlord for a refund, which prompts the landlord to write their own, legitimate check to the tenant. Unfortunate for the landlord, since the check will likely appear to clear through the bank before it’s found to be counterfeit and the landlord is at a loss for the funds refunded to the would-be tenant.
Solution: Before you accept payments and commit to a lease, request references and proof of income from potential tenants. You should also consider running a credit report to screen for payment history. Another option for landlords is to utilize a property management company to identify and screen potential tenants.
Visit the FBI’s website for additional tips and resources on Common Rental and Real Estate Scams.