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6 Ways to Spot a Fraudulent Real Estate Agent

Written by Posted On Thursday, 09 November 2017 07:05

Think of this scenario: you’re a first-time home buyer who saved up money all his life to buy his dream home. As you search on Craigslist, you read an ad that promises low-interest rates or lows down payment schemes — isn’t that too good to be true?

You set up a meeting, you went to view your dream home, everything seems to go according to plan. You’re pretty much convinced the agent you’re talking to is legit — he even gave you cookies while discussing the payment plans for the house. During the time you’ve spent with this guy, you’ve been thinking: “I can trust this guy.”

He recommends that you send your payment to him and he’ll take care of the rest. Pretty convenient, right?

Unfortunately, after three days, four, five, a month — you never heard back from him. You even went to the property location to look for him, but no one actually knows him personally or even knows his affiliation with any agency.

It dawned on you-you just got scammed!

 

How to Spot a Fraudulent Real Estate Agent

 

To avoid losing your hard-earned money and protect yourself from these scammers, here are six ways to spot a fraudulent real estate agent:

1. No License

States that do conduct checks may not delve that deeply into an agent's background. It is up to you, as a consumer, to research and checks the backgrounds of potential real estate agents and brokers. If you do not conduct a background check, you may end up with an agent who is unlicensed, unethical and unqualified to help you make one of the biggest purchases, or sales, of your life.

States will have boards that license and discipline real estate agents. Check with your state’s regulatory body to find out if a prospective agent is licensed and if there have been any disciplinary actions or complaints. The information may be posted online.

Identity fraud has become a significant risk for property agents, as scammers attempt to pose as the true owners of a property. In some cases, properties have been sold without the knowledge of the true owners.

Always make sure that a party to a real estate contact is who they claim to be.

2. Money down scams

We have all seen the advertisements on television or the Internet. A person says that you can buy a house with poor credit and no money down. A lot of these ads are trying to sell you a system that they claim will work and even give you money at the closing. There is an old saying that says if it seems too good to be true then it probably is.

The terms of how much and who pays commission is negotiable and should be spelled out in any real estate contract. In most instances, it’s the seller’s agent who pays the buyer’s agent the agreed percentage of the sale proceeds.

Homebuyers shouldn’t have to pay the agent out of pocket to help find their dream house.

“First-time buyers don’t understand that it doesn’t cost them anything to have their very own buyer’s agent who will be working for them,” says Colleen Malone of Moxie Realty in Portland, Oregon. “I get paid by the listing agent — not the seller, not the buyer.”

If there is no listing agent, and the house is for sale by owner, the buyer’s agent needs to negotiate with both the buyer and seller to determine how he or she will be paid for their time and expertise. It could be a flat fee or a percentage of the home sale proceeds — either way, payment needs to be addressed in advance of any sales contract.

3. They skip negotiations

They often do not want to negotiate, because all they want is the money from the security deposit so they can run away and start again. Do not be fooled by terms like one time only, best deal or by too low prices even in a market filled with foreclosures.

4. They seem too eager and push too hard

Many real estate agents have several bookings for a single listing-you are just one of the many prospective customers. If they seem too eager to close the deal, you may have a fake one in your hands. They also tend to give you everything you need in detail, even bad stuff to come across as honest and forthcoming.

Scammers know that they can be discovered at any moment, so they push to close the deal as soon as possible. They give deadlines and continually badger you to “close the deal.” A true real estate agent knows that clients often need time to think and evaluate but only pushes you so far. They can take this too far by constantly calling, asking for your signature and giving you lines like “other parties are also interested in the house.” A real agent would be developing the other parties, not pushing the house or apartment on you.

5.  They post fake rental listing

Scammers create fraudulent rental listings using photos and details from legitimate postings already online.

In the Hagans' case, the scammer may have used images from the real estate company's website where the Hagans' had posted their home for sale.

According to the FBI, scams like these cost Americans nearly $20 million in 2014. And the bureau estimates the actual number of cases could be 10 times higher because many aren't reported.

6. They ask for your personal information or documents

Some fraudsters target the elderly and ask for their personal information. This is another modus operandi of committing identity fraud. If a caregiver or family member has regular, open communication with the elder, frauds can be prevented. Ask your elder to never sign anything or give any personal information, such as a social security number or credit card numbers, without calling a family member first.

Some fraudsters target the elderly and ask for their personal information. This is another modus operandi of committing identity fraud. If a caregiver or family member has regular, open communication with the elder, frauds can be prevented. Ask your elder to never sign anything or give any personal information, such as a social security number or credit card numbers, without calling a family member first.

 

The Other Side of the Coin

 

Real estate scams are rampant, with income fraud risk jumped 12.5 percent year-over-year. You might be a victim of this kind of fraud if you’re not prepared and well-informed.

On the other hand, even real estate agents can be victims of fraud due to identity theft. If you have been charged or are being investigated for the crime of fraud, it is important that you take the right steps to protect yourself. Speaking to a fraud lawyer, you will be able to benefit from their experience. For example, crime lawyer from New Zealand (crimelawyer.co.nz) pushes the importance of speaking to a professional fraud lawyer before your case proceeds any further. Without the advice of a lawyer, you may find that your situation gets worse.
 

For instance, it is usually quite difficult to track and prove a case of fraud. Instead, law enforcement agencies often push defendants towards thinking that they have more evidence than they do. They will then agree to admit to the act of fraud and can be found guilty of the crime. With a lawyer on your side, this can be avoided.

If you find yourself a victim of a fraudulent agent, or if you spotted offers that are too good to be true, inform the authorities right away! Make wise decisions and don’t be fooled by low, low, low prices. Your hard-earned money will be safe from these scammers!

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Samantha Gonzales

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