Working with real estate can sometimes be both fun and scary. Regardless if you are new to the world of house flipping, or a seasoned veteran, real estate is amazing. If you are looking to rent a house, or even just hire affordable movers Chicago, there are plenty of options. Review websites and advice from friends, are just a few ways of finding what is best for you. Like in every industry, you will come across some deals that are better left avoided. When deciding on how and where to spend your money, you must do your due diligence and be prepared. Avoiding real estate scams is your main concern when looking for a new home.
Becoming involved in a bad deal, or trusting the wrong person can be financially devastating. Luckily, there are ways of recognizing these red flags and walking away with your wallet intact. If it sounds too good to be true, chances are, it probably is. There are many different real estate scams waiting to happen, and we will present you with the most common ones. We will tell you what to look out for, and how –these scams usually happen. With our help, you will arm yourself with knowledge and react before it is too late.
Avoiding real estate scams in rentals
When you look for rentals, or residential movers Chicago, your first go-to would be one of the many websites available. However, you still want a website that is reputable and safe. Ads on sites such as Facebook or Craigslist are legitimate in most cases, but these sites aren’t really meant for advertising real estate deals. This makes it all the easier to post fake adverts on these sites. Online scammers are very prone to post about a rental property, ask for payment upfront as a security deposit, and then disappear once they receive the money. The ones who are especially vulnerable to these scams are young adults, seeing as scammers mostly target first-time renters. Avoiding real estate scams like these is easy by asking to see the place in person before paying. Having the chance to ask questions before signing a contract or giving a deposit can change the situation.
Red flags to look out for in rental scams:
- The posts are usually made by profiles with no profile pictures.
- The seller asks for payment upfront, before a property visit.
- In most cases, the seller will refuse to send photos of the house.
- There is little to no documentation.
Quick fix scams
In a lot of cases, the seller is in a hurry to get the property under contract or sold. This leaves a small window of time to properly take care of the property. Regardless if it is mold, ants, or lead-based paint, every home has some type of problem. Sadly, unethical owners will try and sweep these problems under the rug. Even though many sellers are reliable and will fix the issues before listing, it still doesn’t hurt to do research as a buyer. Because of mishaps like these, it’s smart to invest in moving insurance. If you make sure that a minor cosmetic touchup is not hiding a structural disaster, you will save thousands of dollars. Looks can sometimes fool you, so make sure to ask for any paperwork that shows routine maintenance and inspection has been done.
Warning signs of a cosmetic scam:
- Recent and unexpected changes to the house.
- Closed doors and restricted parts of the property.
- The owner refuses to provide maintenance paperwork.
- A recently renovated area of the property is overpriced.
Loan frauds are another common real estate scam
If something is too good to be true, it most likely is. The same applies for loans. When you are offered a loan with amazing interest rates, you may be walking into a trap. Dishonest loan companies that present themselves as mortgage agencies guarantee discounted loans for a small fee. If any business asks for personal information or bank details, it is smart to do some extra research on them before signing a contract. Websites like the Better Business Bureau are often very reliable in these situations. In addition, asking for testimonials or previous customer experiences is more than fine and helps in avoiding real estate scams. Any company that works outside of a well-known bank has to go through the research before a deal is struck.
Common warning signs that point to a loan fraud:
- Great interest rates and huge promises with little to no background info.
- The company asks for personal bank information without explanation.
- There is little to no way of contacting the loan company, either in person or over the phone.
Real estate agents without a license are a problem waiting to happen
There is no real difference between a real estate agent that has an expired license, or no license at all. To avoid this problem, always make sure your transactions are legal by asking your agent to show you their license. Online reviews and customer claims do not always mean that your chosen agent has a valid working license. In some cases, rogue agents may work together with companies dealing in moving scams. It is also important to note that a real professional wouldn’t mind eliminating doubt from their client by showing valid qualifications. Real estate transactions are often expensive, and time-consuming, so spending some extra time to make sure everything is ok will be well worth it.
Fake lawyers conduct real estate scams as well
Red flags to look out for with real estate lawyers:
- The lawyer reaches out to you independent of the seller.
- Their lack of professionalism may indicate real estate scams.
- The seller isn’t aware of the lawyer in some cases.
- There is no existing record of the lawyer or their alma mater.
Clever con artists are capable of pretending to be lawyers in order to take a percentage of a sale for themselves. Luckily, there are a few easy ways to check if your lawyer is who they present themselves to be. If, for example, the seller offers you their lawyer’s contact information directly, then they are most likely legitimate. You can very easily confirm this information as a buyer, too. Contacting the seller via email, phone call, or in-person, can help you confirm that his lawyer’s information matches the info you have on record. Even though this scam is new and rare, it still doesn’t hurt to prepare ahead and avoid financial ruin.