Real Estate Scams: What To Do?
When it comes to real estate, there is so much to keep an eye on your head can spin. From interest rates to how well the housing market is doing, there’s a lot to take in that can make you feel queasy.
One aspect of real estate people need to be aware of is scams. There are always shady characters looking to get-rich-quick, especially in real estate, and they do that by preying upon the unsuspecting and uninformed. During the housing bubble, scams commonly manifested from fraudulent brokers who issued predatory loans, or as home flipping reached a feverish pitch, real estate gurus charged tens of thousands for get-rich-quick courses. Once the bubble burst, many of the swindlers set their sights on cash-strapped folks facing foreclosure. You would think that mean people would give up on their need to scam people during tough times.
But as housing continues down the road to recovery and technology evolves, real estate scams have not slowed. In fact, despite government initiatives on both the federal and state level, they’ve become more elaborate and sophisticated. That’s why the non-profit program NeighborWorks America launched the Loan Modification Scam Alert Campaign in 2009. NeighborWorks America has tracked consumer complaints pertaining to loan modification fraud since its inception and counts roughly 35,000 complaints over that period. Despite an effort to educate the public, the complaints have not decreased. Around 6,000 of the organization’s 35,000 complaints came in the first six months of 2013. According to Forbes and recent numbers, the cost of a con has shot up. The average victim in 2009 lost $1,000-$1,500; today, the typical victim loses $4,000-$5,000. And statistics show that even five-figure losses have popped up.
Here are some of the recent scams con artists are using.
The Federal Trade Commission lists some rental scam warning signs on its website.
Some things you will hear in these seminars: Raising your credit card limits, the hard sell to learn everything possible (made available by the raised credit card limits you called about), more courses, field trips, mentoring and investment details. Bigger Pockets gives you four ways to avoid these guru scams.
So what can you do? The best solution is to be informed. If you’re educated, do your homework and know what methods swindlers are using to con people, the likelihood of getting scammed decreases. One thing to keep in mind: If it’s too good to be true, it probably is. Here’s another motto many journalists follow: if your mother tells you she loves you, make sure. If you follow that advice and practice caution, your risk goes down. Being careful is a good idea in every facet of life – especially when money is involved