Buying a new home can be equally exciting and stressful. And for new or inexperienced home buyers, the process can be especially overwhelming.
To make the situation even more complicated, scammers may attempt to swindle buyers during this time. To protect your money and your potential home, you should know how to spot a few common scams.
Wire fraud transfers
As this Forbes article discusses, a scam involving wire fraud often starts with hacking or otherwise gaining access to a real estate agent’s email, allowing a person to learn the details of upcoming purchases and buyers’ contact information.
The person then contacts the buyer posing as the agent or other party involved in the transaction and requests a down payment or closing costs through wire transfer. If the buyer follows the scammer’s instructions, the wired funds would be lost.
To avoid this common real estate scam, you should always double-check your communications. Are you emailing the exact same email address? Are you sending documents through a secure source? Have you talked to the person requesting the money to confirm instructions? Taking these steps can reduce the risk of wire transfer fraud.
Covering up issues and defects
Sellers must disclose certain information that could affect the price of a home. However, some will hold back information or attempt to cover up problems. Buyers may not learn about issues like toxic mold, a defective foundation or neighborhood nuisances until it is too late.
Therefore, buyers should have a reputable inspector inspect the home before the sale. They should also visit at various times, review repair records and talk to neighbors to learn as much as they can about the property.
Inflated price schemes
In a competitive housing market, buyers may be desperate and willing to pay more for a home. However, some scammers will artificially inflate the price of a home.
To do this, parties may use fraudulent appraisals or alter appraisal documentation. Buyers should scrutinize reports and ensure a professional appraiser assesses the property. Getting a second opinion may also be wise.
These scams could cost you the money you need to buy the house you want, so be aware of them and consult an attorney if you are worried about fraud or misrepresentation during a real estate transaction.