Real Estate Business: How to Avoid Losing Hundreds of Thousands for Scammers

Real estate business is not an easy profession to take on. Although it is profitable in the short and long term and can be quite interesting once you get the hang of it, it is still a risky business if you do not know much about the ins and outs of the field. A lot of first timers in the real estate business investment lost hundreds of thousands because they were unaware of the risks of the real estate investment.

Like any other business in the world, real estate has a lot of people who will try to leech on you and steal your money without you even realizing it. This is because these scammers are smart, mischievous, and quite cunning. They know the ins and outs of the real estate business, they have studied how people new to the business react to offers, and they make sure to take advantage of that. They manipulate people, even those who have been in the real estate business for years, and stealthily steal their life savings.

This does not mean that you should rethink your real estate investment decision. On the contrary, what this means is that you only need to be aware of all the scamming schemes and learn how to detect and avoid them at all costs. In this article, you will learn the most common scammer tactics and all the ways in which you can avoid them. Whether you are buying or selling a house, this will be a helpful guide for you.

Most Common Real Estate Business Scams These Days

Real estate business scams are becoming more popular and easier with online transactions and agreements. Scammers are getting creative, smarter, and harder to spot with all of this technology that could potentially help them forge an entire business identity. This is why the following list will give you an insight on the most common frauds nowadays. This way, you can avoid falling for these scams.

Hijacking business emails

This is the most common type of fraud that people usually fall a victim of. This scam happens when real estate business emails are not secured with enough protection, and they get hacked by a scammer, leaking all of your information and deals. The danger of this scam, other than having your information exposed, is that the scammer will usually impersonate the dealer with which you are working.

Usually, they will ask you to wire transfer escrow funds to their personal account instead of business account. Reports show that Business Email Compromise frauds have risen up to 69% over the last few years. The warning signs you should be looking for include real estate agents who do not discuss their cybersecurity measures. If they avoid answering such questions, you need to be careful while working with them. It is best to do real estate business deals with an agent who is aware of the dangers of online scammers nowadays.

Manipulating agreements, processing fees, and real estate contracts

A real estate agent would want to lock your contract as soon as possible by getting you to sign it with a lock-out clause (not allowing you to sell the house to anyone else). As we mentioned before, scammers are smart and cunning, which means they will take advantage of your desire to finish the business transaction, so you do not wait for the cash for months. Using sellers’ needs, the scammer will ask you for processing fees and, a lot of times, for a reduction in the price you already agreed on in order for them to complete your house sale.

The warning signs you need to look for here include cash buyers, agents who seem pushy, rushed, and desperate to lock out your contract. Scammers in this case take advantage of people who are facing financial problems and are looking to get cash as soon as possible.

Cashier’s checks scammers

If someone contacts you to buy your house and does not ask to see it, or evaluate it, then you should be suspicious of them. Scammers who impersonate buyers would send you financial documents, their contact information, their business cards, and even recommend that you hire a real estate lawyer, so you are not suspicious of them.

The process usually happens when they send you a cashier’s check that includes thousands more than the price you agreed upon with them. The scammer will then ask you to wire the extra money back to them, and if your bank is not secure enough, your bank information might get leaked and stolen.

Off-market sales

These scammers will usually approach you to buy your property without you contacting them first. They will sound and look legitimate because of their specific communications and procedures. However, the catch here is that they will try to offer you a much lower price than what your property is worth on the market, or they will try to manipulate you into giving them your banking information, usually indirectly, through phishing.

These offers might sometimes appear too tempting for you when you need quick cash and do not want to go through the longer way process. Nevertheless, please make sure you are contacting the best agents who you can trust when it comes to selling or buying a property smoothly. At fidesprop, we offer you the best prices and the safest process for your real estate business.

Home inspection scams

Home inspections are essential to the real estate business, in both the buying and selling process. This is because it is how the lender makes sure that you are paying the reasonable value for the property. In this type of fraud, however, the fraudulent buyer/seller will hire someone they know to perform the inspection and hide or come up with fake potential problems with the property to raise or lower the property value, depending on which side they are on.

You can avoid this type of scam by hiring your own inspector, asking lots of questions, and making sure the process is going how it is supposed to.

Upfront administrative fees

One thing you need to know about authentic real estate agents is that they will never ask for upfront administrative fees. What happens in these frauds is that the “agent” will contact you to buy your property or claim that they have found the perfect buyer for it. This fake agent will tell you that they cannot complete the sale before you send them administrative fees or money for taxes. Once you fall for their trick and send them the fees, they will disappear off the face of earth, with the money they stole from you. The warning signs here include upfront fees, money-back guarantee, and a quick sale offer.

How to Avoid Real Estate Business Scams

Before you enclose any business deal, you need to make sure that you thoroughly checked the authenticity of the agent, their reputation, and their offers. The best way to check for the agent’s authenticity is by asking for their agent broker card. Do not be the next victim for scammers to leech on. Be aware, do not enclose your financial information to anyone, and make sure you are dealing with the best agents only.

At fides properties , we offer you a secure process, a smooth business, and the best deals on the market. Get your offer today by contacting us.

Bottom Line

Even if it seems like an overwhelming process to go through, checking for scammers is always a must when it comes to real estate business investment. Use the tips we provided you with, and trust what other people are saying about an agent. Listen to your brain, because if something is off about the deal you are locking, then your gut will surely alert you!