October 11, 2023
Buying
There probably hasn’t been a house hunter in history who didn’t want to get a great deal on a house. But in the current market, even finding a house you want and successfully getting it under contract can be a difficult task.
So if you were to find what seems to be an incredible deal, or an under-the-radar listing that nobody else is aware of, it’s understandable why you might want to throw caution to the wind and scoop it up, even if there are some red flags.
But, as the saying goes, if it seems too good to be true, it probably is…
Scammers aren’t new to real estate; they’ve been around for years in different forms. But according to this Fortune article, seller impersonation fraud is on the rise. Fraudsters are pretending to own property and putting it up for sale.
In the least, they’re hoping to get their hands on someone’s down payment money before the buyer realizes they don’t own the property. But they could also get away with the entire purchase price of a house, if a buyer never realizes it’s a scam.
Unfortunately, even a homebuyer who is typically cautious and logical can fall prey to them because they use fear-of-loss tactics, like listing the house for below market value, or suggesting that they’ll accept a lower price if you can close quickly.
You’re more likely at risk when a property is not listed through real estate agents, and is being marketed for sale by the alleged owner online, but a scammer could possibly sneak past a listing agent’s scrutiny and get listed on the MLS.
To protect yourself from this scam, here are some red flags that should trigger you to be extra cautious:
While those red flags could occur when dealing with a legitimate owner of a property you want to buy, it’s still better to be safe than sorry.
Working with a reputable buyer’s agent that you know and trust, or has been highly recommended by others, will go a long way in protecting you from getting scammed by a fake seller. He or she will help you discern if something seems off based upon their experience, and look into it more thoroughly.
But if any of the above warning signs are present, or you just get a sense that something isn’t quite right, here are some things you and your agent can do to put the “owner” to the test:
As hard as it is to feel like you might be jeopardizing your shot at getting a home you want, or a great deal by demanding any of the above, you’re better off taking that risk than risking losing money you may never be able to recover, and still not ending up with the house you thought you were buying.
The Takeaway:
Scammers have been taking advantage of the low inventory and high buyer demand in the current market to prey on buyers who are desperate to buy a home by pretending to be the owner of a home they have no right to sell.
Make sure you work with a REALTOR® you trust — and the services and professionals he or she trusts — to help you gauge whether or not a seller is the true owner of the property you’re buying. When a deal seems too good to be true, or there are other tell-tale signs that the seller isn’t truly the owner, dig deeper and require proof. An actual owner of a property will understand your need to protect yourself and provide the proof you need to proceed with confidence.
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