Buying real estate is a tricky process. And what makes it even trickier is the bevy of scams that unscrupulous individuals will dish out upon potential buyers. 

Curious as to what these scams are? Then keep on reading. Here are 4 forms of real estate fraud everyone needs to know. 

1. Rental Fraud

Perhaps the most prominent form of real estate fraud is rental fraud. This is often carried out on sites like Craig’s List. Fraudsters will post fake real estate rental listings, often showing high-end properties at exceedingly low prices. 

Then, after the interested party has inquired about the property, the fraudster will ask for payment via money transfers. The interested party sends the payment and — voila! — he or she has just been scammed. 

How do you avoid this? By seeing the property in person, by meeting the property’s landlord, and by signing a lease. Failure to do any of these 3 things can leave you vulnerable to rental fraud. 

2. Foreclosure Relief Fraud

You’ve hit hard times. You’re not making your mortgage payments. You’re on the cusp of losing your home. 

All of a sudden, you get a call informing you that you can be saved from foreclosure . . . for a “small” fee. While you may be desperate, you need to resist the urge to pay this fee. 

Why? Because, in all likelihood, it’s a giant scam. Real estate scammers love to prey upon those in tough situations, as they know that their desperation makes them more prone to making bad decisions. Don’t fall victim!

3. Escrow Fraud

Another scam that you’re going to want to look out for is escrow fraud. This generally occurs through email. An unscrupulous individual poses as your lender and asks you to put money in escrow for your home. 

If you do this, of course, you’ll be out a substantial amount of money. As such, when clicking through your emails, you need to be vigilant. And before sending over any money, make sure to speak to your lender for confirmation. 

4. Misrepresentation Fraud

Both buyers and sellers can commit misrepresentation fraud. This occurs when one or the other exaggerates or alters information pertaining either to a financial situation or the state the property in question. 

For instance, if a buyer claims to have a certain amount of money but is later found to have exaggerated his or her income, he or she will have been found to have been committing fraud. Likewise, if a seller says that an 8-year old HVAC system is, in fact, 2 years old, he or she is also committing fraud. 

Real Estate Fraud Is a Legitimate Danger

In today’s world, real estate fraud is a legitimate danger. As such, when attempting to buy real estate, it’s important that you keep the above-reviewed scams in mind. Doing so could save you thousands of dollars and a lot of wasted time. 

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