Tuesday, 23 May 2017

Latest Real Estate Scam Turns For Sale Homes Into 'For Rent' Homes

Written by Realty Times Staff Posted On Tuesday, 01 October 2013 19:27

Miscreants stalking the real estate market with the latest real estate scam can be smart cookies.

They never stop finding deviant ways to strip housing market consumers of their hard earned cash.

Especially when the public and approaches to real estate marketing help make a real estate scam so easy.

This latest real estate scam reported by the Santa Clara County Association of Realtors is a spin on the old switcheroo.

The grift 

One day, your friendly neighborhood real estate agent dutifully lists your home on Craigslist, ForRentByOwner.com, even Trulia.com or Apartments.com.

The next day you can find the same property "listed" online in a different ad as a "rental," according to the association.

Trouble is, the "rental" doesn't really exist as a rental. The "for sale" information has, however, been lifted for use in the "for rent" ad.

Used to be, the crooks would be too lazy to find a real home for rent or sale. Instead they'd lead dupes to occupied properties - after they'd collected a rental deposit or even months in rent.

With the new more sophisticated real estate scam, when people call about the home for rent, the charlatan tells them that the home is unavailable to show or can't be shown and proceeds to offer a rent they can't refuse.

The dupes

Duped renters complete a fake rental application and provide personal, confidential information, including their Social Security numbers. Others go one step further and shell out a first month's deposit or more in the shake down.

That could be $2,000 or much more in today's hot housing and rental market.

Not only have they lost money, they've become a potential identity theft victim, which could cost them vastly more money than they shelled over in the scam.

Identity theft-related credit problems could cost even more money in the time it takes to clear up the problems. Meanwhile, access to credit - say to rent or buy a home - could be reduced or blocked until the credit problems are cleared.

"A lot of Realtors have been affected by this," commented Carl San Miguel, President of the Santa Clara County Association of Realtors.

"We want the real estate community and the general public to know it's a hoax. By creating awareness, we can hopefully reduce the number of people affected by the scam in the future," San Miguel.

The questions 

Yeah, but…here's what's a little baffling, especially when it comes to Craigslist.com.

Along with the latest Craigslist-based real estate scam and previous real estate scams, Craigslist has been used to lure and kill victims, by prostitutes, by sex offenders, by those who want to lure and rob or otherwise harm victims, and worse, to use ads to prey on children.

It happens online elsewhere, but Craigslist is frequently in the news facing charges.

Keep in mind, yes, the vast majority of ads on Craigslist and the other sites are posted by upstanding, honest people just trying to make a buck.

But it only takes one to ruin your day. Just one.

Maybe it's time for the real estate industry to cut ties with Craigslist and other websites that don't police their ads or take action against violators.

Is an ad on Craigslist worth so much as a marketing tool that it's worth taking the risk?

Are there any real estate agents who actually boast about using Craigslist and boost their marketing prowess by using Craigslist?

With all the digital marketing available and the widespread awareness of what goes on Craigslist, why does the real estate industry really need to use Craigslist as a marketing tool?

Because it's free?

Real estate industry reponsibility 

The real estate industry has a contractual mandate to market properties to the largest audience possible, but they also must protect clients and the clients' best interests.

In the name of transparency, are clients made aware their ad could be posted on Craigslist and that some Craigslist ads have led to crime?

Is that disclosure included in the marketing plan? It should be.

Are clients told they can opt out of certain marketing efforts? That applies to marketing anywhere. They should be.

The press release that prompted this story offers some tips to protect clients from Craigslist's and others' scams, but it says nothing about clients grilling the real estate agent about the marketing plans the clients pay for. Clients should add "where will you market my home" to those lists of "how to choose a real estate agent" tips.

Clients should ask, "What is the industry doing to curb fraudulent activity from the business end? Are you reporting to clients, before they begin marketing, which web sites have incidents of fraudulent ads taking consumers to the cleaners?"

Don't fall prey 

In any event, the association says consumers that scammers hunt should be skeptical if they are:

Quoted a price that is too good to be true. Check the going rates online for the type of property being offered. Check for reports from RealFacts.com or other organizations that keep tabs on rents.

  • Asked for a substantial deposit before the keys are handed over or the property has even been shown. Never contract for any real estate deal without seeing the property.
  • Asked to wire money. Wiring money to strangers for any reasons is always fraught with risk.
  • Receiving communication via email only and the person emailing is located elsewhere - out of town or even out of the country. If they are out of site, keep them out of mind.
  • Check to see photos of any property officially listed on line, with an agent or MLSListings.com, then drive by the property to see if a For Sale sign is still there. Often, the for sale sign will go missing from the yard soon after a "for rent" ad goes up Craigslist or other Internet site.

    Finally, the item that's not on this list:

  • Ask your real estate agent about any fraud they are aware of when it comes to digital or other marketing. Don't accept a simple "yes" or "no." Ask, "How do you know or why don't you know. It's a tool you use every day."

A real estate transaction isn't small potatoes and some of your personal information goes with the deal. Let your agent know you have a right to opt out of any marketing you don't approve and that the agent has fiduciary duty to look out for your well being.

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  • Comment Link George Frazier Friday, 28 March 2014 21:26 posted by George Frazier

    I will try to keep my response reply and not a rebuttal to your comment.

    Continuing Education, training, practice, skill sharpening and the list goes on mean virtually the same thing to me.
    Where they differ is what you learn and how you use it.

    A little background: For real estate persons, old timers like me, continuing education is for 22.5 hours after passing the sales person licensing course and in my case the broker’s course.

    Continuing Ed ends for me after I obtain a certain number of years as a broker.
    Today’s standard is 75 hours of the sales person licensing course and 22.5 hours of continuing education, which never ends unless you give up the license, broker or agent.

    Continuing education course curriculum do change and you can choose to learn different aspects of real estate. In my last cycle I chose to learn about the appraisal process, before that real estate law and before that the course was heavy in fair housing. While it is true that we touch on these in our initial training, Continuing Ed allows for you to learn more about a subject or in the case of my last training to learn something new.
    Therefore, continuing education should not be underestimated; in my opinion more jobs should require it.

    I personally use an enrolled agent to do my taxes because their continuing education–training–allows them to represent me and be present with me should I be audited by the IRS. This is a distinction given only to enrolled agents.

    As for promoting Realtors vs. FSBOs that just not true. First I’m not a Realtor. I’m a real estate broker. I used to be a Realtor but I decided not to renew my membership. All Realtors are real estate agents or brokers not all real estate persons choose to be Realtors.

    Nonetheless, I promote neither. I promote knowledge and getting that knowledge to those that want it, either through my blog or my comments on sites such as this one.

    Why? I just got tired of people over simplifying real estate, getting burned and then turning to either myself or other real estate persons to bail them out.

    Due diligence is a nice sounding word for homework. But it does not state a level of due diligence and where you should look.

    Consider the following:
    True story: A person takes the real estate course, passes it and sells his 1.2 million dollar condo without the aid of a real estate person. Is this due diligence or over kill?
    A person attends a seminar given by a “real estate guru” pays the large fee, follows the course and is successful in purchasing real estate. Is this due diligence?
    That same person after attending the seminar looses all his or her money in a single real estate transaction. Is this the result of not enough due diligence?

    Am I over simplifying, yes and so is the thought that by due diligence one can be successful in real estate, especially New York real estate.

    Fact: New York is one of the states where you must have an attorney to buy and sell real estate because it is considered to be very complicated and people have lost fortunes in the process, due diligence or not

    I’m going to cut this short mainly because I have a blog that tackles this very subject. In fact we just released the first of a series of articles entitled: Crimes in Real Estate, true stories of scams that were either perpetrated on customers or attempted on me.

    Real estate is a minefield and I got my eyes opened not soon as I got into it. Now I try to educate those that ask for my help.

    Sure you can find an honest owner or renter but do you know how to tell the difference? What are the red flags? And does a person who has to work all day really have the time to do a thorough due diligence and to what level?

    A house is probably the most expensive item we of the 99% will ever purchase therefore, I believe when in doubt of your skill in this area hire a professional.

    After all would you purchase a used car without hiring a professional to look it over for you?

    Thanks for your comment Mike. If I could plug my site I would but you should be able to locate my blog on Google or Facebook or Word Press.

  • Comment Link Mike Tuesday, 25 March 2014 22:21 posted by Mike

    @ George Frazier: you're saying that brokers & agents in NY 'train' every 2 years -- does this mean Continuing Education? Mostly this means that they are required to have so many hours of CE every 2 year -- not necessarily 'train'.

    I understand that you're trying to promote the Realtors vs FSBO. However you can't deny that it's impossible to find an honest rental and/or property for sale if you use your due diligence.

  • Comment Link Scary Times Monday, 03 February 2014 17:59 posted by Scary Times

    Hi, I too agree with your comments to the article regarding scammers. Like yourself, I am also in the real estate industry, but on the transferring end. Therefore it is really unsettling to know even though I work for the insurance company, there are still things that get by the title company. We have no clue as to whether the parties know each other or are in some type of scam with each other, saying that, the insurance companies also take a huge loss when this information is uncovered, of course after the transaction has been closed and property transferred. To me, its so unfair because how would we know? All we have is an executed contract signed by all partners. Our instructions start there, so if it's not in the contract, unless one of parties share some of the hidden information, there is no way of patrolling a scam transaction. They are coming up with new ways to trick the system every day. I am sure there are some new tricks that the FBI has not uncovered yet. As you stated, until an expert is hired, the scams will continue! As the saying goes, "you get what you pay for!"

  • Comment Link George Frazier Tuesday, 26 November 2013 04:51 posted by George Frazier

    First let me say I agree with most of your article but you like so many others write articles about real estate and ignore one important thing.
    Every state has different real estate laws. Nothing is universal.
    First Craigslist is not free in New York for brokers.
    Secondly, owners themselves place apartments on Craigslist in an effort to bypass broker fees.
    Third tenants bypass brokers to avoid broker's fees.
    Fourth like myself – a real estate broker – we search the web, listen to news reports etc to get the latest on the newest scams.
    However, as is said in the commercial "An educated consumer is our best customer." Problem is the Internet has people believing that they have the skills to go one on one with scammers. This is where the failure begins.
    Agents and brokers – at least in New York – train every two years. Throughout the year we look out for scams and do the best to protect both tenant and owner.
    Since owners or someone claiming to be an owner can list property on any site except the MLS there is no safe site.
    If you want to be protected in your rental or buying search, hire a professional just like you would in any other purchase where you have no expertise.
    By the way, found your piece as I was looking for material for my real estate blog and I will link back to it. You have a great deal on information it just needs to be tweaked.
    However, the real problem is scammers also work to hone their trade and as long as tenants and owners do it themselves the scams will continue.

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