It can be a scary world out there—though a majority of people are good and honest, some like to try taking advantage of others. The real estate market is no exception, so today we’ll be looking at the scams we want to make sure you’re aware of:
1. Mortgage closing scam. This scam has become so prevalent that the FBI estimates it’s led to over $1 billion in stolen/diverted funds in 2017 alone. It begins when a hacker gains access to a real estate agent’s email account. When it’s time to close a deal, the hacker poses as the agent and sends money-wiring instructions to the homebuyer. The truth only comes out after the buyer has already lost thousands. Never wire money without confirming the account with your title company and/or your agent.
2. Fake real estate agents. Similarly to the previous scam, the scammer will impersonate someone who is legitimately involved with a deal. The hacker will often pretend to be a real estate lawyer who is associated with a sale and, at the time of closing, call or email the homebuyer with changes to the money-wiring destination. If this works, the buyer loses a lot of money. In Utah, wire fraud is happening on housing every other day.
3. Bait and switch. Unlike the first two, this scam targets sellers. It also doesn’t require any hacking or impersonation; it just needs a dishonest buyer. Here’s how it works: A buyer makes an offer above selling price and the seller happily agrees. The contract is signed, but then the buyer begins procrastinating and dragging out the process for weeks and months. In the meantime, the seller is becoming worn out emotionally in continuing to pay costs for the home. Finally, the buyer says they can only buy at a lower price and the desperate seller agrees.
How can we protect ourselves from these and similar scams? Don’t send account information over email, confirm everything over a valid phone number or in person, and find an agent who you trust to represent your best interests.
If you’re ever in need of an agent you can put your faith in, our doors are always open. If you’re looking to buy or sell a home, have any questions, or need more information, feel free to reach out to us. We look forward to hearing from you.