As in many industries, real estate is not immune to its fair share of fraudsters attempting to swindle hardworking persons out of their money. This information aims to raise awareness and hopefully prevent would-be victims from falling prey to scammers. Although in recent times scammers have become more creative, it is important to have a general understanding of how real estate works and what can be done to protect yourself in any circumstance.

Title Fraud
Title fraud occurs when scammers use fake documents to sell properties they do not actually own. They may alter original documents and forge signatures to convince you that they are the legitimate owners of the property. No one wants to buy a property only to find out that they’ve been scammed.

To avoid this, secure the services of a reputable lawyer or law firm to perform a title search to confirm the seller’s ownership. The lawyer should also review all documents and agreements to ensure everything is legitimate. While this comes at a cost, it will be worth every cent to have peace of mind knowing the transaction is legal and legitimate.

Fake Rentals
Fake landlords and agents sometimes lure unsuspecting customers into paying deposits for properties they do not own. This is often achieved by advertising properties for rent and asking for deposits before showing the property, or they may pressure you to bring money to view the property due to high demand.

To avoid this, enlist the help of a realtor or property manager who can verify the landlord’s ownership before visiting the property or making any deposits. Rental agreements should be in the name of the owner or company reflecting ownership. Always ask for receipts when making payments or deposits.

Rent to Own Scams
Not all rent-to-own arrangements are scams, as seller financing is a legitimate concept. However, some scammers advertise properties as rent-to-own opportunities and after payments are made, the buyer discovers they’ve been scammed.

To avoid this, seek legal advice from a reputable lawyer or firm. Also, check the price against market values of similar properties in the area, as rent-to-own properties often differ significantly from what’s typically available. It’s also helpful to research the company or person offering the rent-to-own deal to verify their legitimacy. A good question to ask is: why would a seller prefer to wait 4, 5, or even 10 years to collect money when a regular sale could be completed in 90 days?

Tips and Reminders to Protect Yourself
Even if you can afford to purchase a property with cash, always conduct a thorough title search through a reputable entity to confirm the seller is the rightful owner. Before making any commitments, seek the advice of an attorney to review all agreements and associated documents. Always ensure that you get agreements and requirements in writing, including rental agreements that should outline guidelines specific to the property.

As best as possible, avoid cash transactions, as other payment methods are safer and traceable. Working with an experienced and reputable real estate professional can make the process smoother and less stressful, as they can help guide you based on your preferences, budget, and needs. They may also have encountered issues with vendors or landlords that they can help you avoid.

In conclusion, protecting your money from real estate scammers is just as important as your investment itself. Take the necessary steps to ensure that your real estate dealings are legitimate and secure.