Confusing mortgage documents and loan agreements are bad enough, but prospective home buyers should be aware of a number of real estate scams to avoid. Below are 3 tricks and scams you should be aware of before searching for your next home or agreeing to rent your property:
Last-Minute Loan Modifications
Used for decades, the “bait and switch” technique is when a product, in this case a home loan, is offered at one price, only to for the hapless victim to find out that they’ve been conned into paying a much higher price when the transaction is concluded.
Unscrupulous lenders offer home buyers a very attractive low rate when they first apply for a home loan, but then pressure the signers into accepting higher rates and additional fees when it’s time to actually sign the documents. Worried that they might not be granted the loan, the victim then agrees to the new, and much more disadvantageous, terms.
It may seem like a remnant of a bygone era, but law enforcement agencies know that check fraud is still prevalent in the domain of renting real estate. When you have a property available for rent, scammers will issue you a check in order to cover the deposit to secure the property.
So far, so good. But the next step the hoaxer will take is to tell you that they’ve changed their mind, and want a refund. When the unsuspecting victim deposits the check, the bank will often grant immediate access to the funds, even though the check is no good. It’s only after writing a counter check or refunding the money in cash that the victim finds out that the original check was counterfeit or worthless, leaving them not only out of pocket for the refund but also responsible for additional fees and charges from the bank.
The Out-of-Town Owner
With the prevalence of digital ads, it’s easier now than ever to post a false listing for a home or apartment for rent. When an interest party contacts the so-called owner, the scammer will then tell the person that the owner is out of town, or even out of the country, and then request that the security deposit be mailed to where the owner allegedly is.
Most of these listings involve properties that are advertised at prices “too good to be true”, especially because many of them are. Victims get excited at the thought of acquiring or renting a property at a super low price, and thus fail to exercise due diligence when mailing out hefty security deposits to “owners” who are supposedly out of town.
Be cautious of these real estate scams. One way to protect yourself is by working with a trustworthy, professional real estate agent.
If you’re looking to buy or sell a Nashville home, our award-wing real estate agents can help. Give us a call or drop us a line today.