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Whether you’re a first-time homebuyer, a seasoned renter, or an investor looking for properties, the real estate world offers opportunities–and unfortunately, risks. Scammers often target people searching for their next rental or home purchase, knowing that emotions can run high during these big life decisions. The good news is that you can avoid these traps with a bit of awareness and caution. Here are some tips to help you steer clear of common real estate and rental scams.
Scams are more prevalent than ever, with real estate scams being a major concern. The FBI’s Internet Crime Complaint Center (IC3) reports that business email compromise (BEC) schemes are increasingly targeting the real estate industry. In 2023 alone, the IC3 received 9,521 complaints related to real estate. While this number might not seem huge, the financial impact is staggering—these scams resulted in losses totaling $145,243,348, surpassing the amount lost to crimes such as identity theft and extortion, among others.
Spotting the ‘Too Good to Be True’ Deal
If you come across a listing that seems too good to be true, it probably is. Scammers often lure victims with incredibly low prices that are hard to resist. Whether it’s a rental property listed below market value or a home that’s far cheaper than similar listings in the area, take a moment to pause. Look up comparable properties in the same area and ask yourself: Why is this so cheap?
Legitimate landlords and sellers have an idea of the market rate. If a deal feels off, dig deeper before taking any action.
Tip: If you’re unsure, consult with a local real estate agent who can provide insight into the average prices for similar properties.
Watch Out for Pressure Tactics
Another common scam is when a landlord or seller pressures you to make a decision quickly. They may say something like ‘There are several other people interested’ or ‘You need to send the deposit right away if you want the place’. This creates a sense of urgency, but legitimate landlords typically give you time to think about your decision.
Tip: Don’t let anyone rush you into a commitment. Take your time to view the property in person (or via a reputable virtual tour) and review any documents carefully before sending money.
Verify the Identity of the Seller or Landlord
In some scams, fraudsters will impersonate property owners or agents. They may ask for an application fee, a deposit, or even the full amount for the property without ever showing you the place in person. Sometimes, they won’t even have access to the property—they’re simply collecting funds for a nonexistent rental.
Tip: Always verify the identity of the person you’re dealing with. If you’re renting, check the listing on reputable rental sites or online marketplaces (but exercise caution on these platforms). If you’re buying, use a licensed real estate agent who can confirm ownership details through public records.
You can also ask for proof of ownership—property deeds or tax records are good indicators. Be wary of anyone who refuses to show this information.
Be Cautious with Wire Transfers or Upfront Payments
Scammers often request payments through wire transfers, cryptocurrency, or gift cards, all of which are difficult to trace and recover. They may ask for an upfront payment before you’ve even seen the property or after a short virtual meeting.
Tip: Never send money via untraceable methods such as Western Union or gift cards. Legitimate landlords and sellers will accept payments through secure methods like cheques and credit cards.
Check for Red Flags in the Lease or Agreement
When renting a property, always read the lease carefully. Scammers might send you a lease that looks too polished and may even include unreasonable clauses. Common red flags include demands for large upfront payments or unusual penalties for breaking the lease.
Tip: Make sure the terms seem fair and reasonable. If anything seems off, ask questions or consult with a lawyer who specializes in real estate law. Most leases should cover rent, utilities, maintenance, and the security deposit–but if they’re asking for more or strange stipulations, think twice.
Inspect the Property in Person (or Virtually)
With the rise of virtual tours and online listings, it’s easy to think a property is exactly described in the photos. Unfortunately, scammers often use attractive pictures of homes or apartments that don’t match the real property. They may even show photos of other properties they don’t actually own.
Tip: Always request an in-person tour or a live virtual tour with the landlord or agent. If you’re unable to do so, ask for recent photos and video walk-throughs. If a property’s photos look dated or the person refuses to meet in person or over a video call, walk away.
Look for the Red Flags in the Listing
Scammers often make simple mistakes in listings that can give them away. Common signs include:
- Misspelled words or poor grammar: Professional listings are usually well-written. If you spot glaring mistakes, it’s a red flag.
- Too many exclamation marks or overly sensational language: Phrases like “must see!” or “this deal won’t last!” are often used to create urgency and desperation.
- Missing contact details or fake numbers: Make sure you can verify the contact details. If they only have an email address with no phone number or contact address, that’s suspicious.
Tip: If you’re renting, a legitimate landlord will usually provide clear contact information, including a phone number and address for verification.
Trust Your Instincts
At the end of the day, your gut feeling is one of the best defenses against scams. If something feels wrong, it’s okay to walk away. Trust your instincts and take the time to do your due diligence before making any commitments.
Tip: Consult trusted friends or family for advice if you’re unsure about a property or transaction. A second opinion can often reveal red flags you might have missed.
Utilize Online Tools and Resources
Before you send money or sign anything, use resources like property records, online crime maps, and rental history websites to verify the legitimacy of the listing. Services like Google Maps can help you identify the actual location of a property, and review platforms (like Yelp or Google Reviews) can offer insight into the reputation of a landlord or agent.
Tip: Use official real estate platforms for purchasing homes. These listings are managed by licensed real estate agents, making them less likely to be scams.
Final Thoughts: Stay Smart, Stay Safe
Real estate scams canunfortunately happen, but with the right precautions, you can minimize your risk. Always take your time, verify all details, and make sure you’re working with reputable parties. By remaining vigilant, asking the right questions, and trusting your intuition, you can avoid falling victim to scams and secure a rental or purchase that suits your needs without any hidden pitfalls.
Are you looking to enter the real estate market this winter? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
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