Buying or selling a home can be an intimidating experience and trusting real estate “professionals” may be daunting.
Unfortunately, like any industry, there are some bad actors. Don’t become a victim!
Here are some real estate scams that we’ve seen recently. If you know what to look out for, you can protect yourself with that knowledge.
1. The mortgage closing scam
This particular scam is spreading across the country. It’s become so prevalent that the FBI estimates it has led to more than $1 billion in stolen or diverted funds in 2017 alone.
It starts when hackers gain access to a real estate agent’s email account. Then, when it’s time to close a particular deal, the hackers, posing as the real estate agent, send instructions to the homebuyer on where to wire the money.
Of course, it’s only after the buyer has sent thousands of dollars to an unknown bank account that the truth comes out - the real estate agent wasn’t actually the one reaching out, and the buyer has been scammed.
Prevention. Select a reputable title company. A real estate agent should NOT be involved in the transfer of funds and your title company should never accept, nor follow, wire instructions from a real estate agent. Additionally, title companies should be insured against such fraudulent activities.
2. Fake real estate attorneys
This scam is similar to the first one, in that the scammers will impersonate somebody legitimately involved with a deal.
In this case, the hackers will impersonate a real estate attorney who is associated with a particular transaction.
Then, at the time of closing, they will contact the buyer, either by email or over the phone, and tell them the wire destination has been changed. If this scam works, the homebuyer could again be out thousands of dollars.
Prevention. Again, selecting a reputable real estate law firm is critical. Your real estate agent will be able to recommend a well-established attorney who is properly insured against such fraudulent activities.
3. The bait-and-switch
Unlike the first two scams, this scam targets sellers. It also doesn’t require any hacking or impersonation—just a dishonest buyer. Here’s how it works:
A buyer makes an offer that’s well above the listed price. The seller happily agrees, and the contract is signed.
Then the buyer starts procrastinating, making excuses, and dragging out the process for months or even a year.
In the meantime, the seller continues to pay costs for the home, and is getting more and more emotionally worn out.
In the end, the unscrupulous buyer flatly says they can only buy the home at a lower price, usually under the listed price. And the seller, desperate by now, frequently agrees.
So, how can you protect yourself against these and other scams?
First and foremost, don't send account information over email.
Confirm everything over a phone call to a number that you already know to be valid…or even better, in person.
Finally, finding a real estate agent that you can trust to represent your best interests is critical. I’d be honored to serve in that role, so please give me a call at (717) 226-0819.
I’ve facilitated real estate transactions in Central Pennsylvania for more than a decade, and I will happily provide contact information for my previous clients as references.
If you’re only just considering selling your home, you might be interested in finding out what your home is worth in the current Central Pennsylvania market:
On the other hand, if you’re looking to buy, take a look at all the great homes that have recently come on the market in Central Pennsylvania:
Click here for all available Central Pennsylvania homes for sale
Have a great day!