Everyone wants a house that they want to own and a special place where they can relax and enjoy themselves.
Buying real estate can be compared to buying a car; you don’t rush in because you want to, but rather you buy it when it meets your requirements. Some prefer sports cars, some prefer limousines, and some may settle for a 4X4. When buying a car, you also check its affordability.
Some may think that investing in real estate can be profitable and thus go on a buying spree, while most may own two, one for residential use and the other for a quick getaway.
No one buys a car without thoughtful consideration, and the same goes when hunting for a house.
However, as there are chances of you being ripped off by a shady garage, the chances are equally high when it comes to buying real estate.
Scammers are out there to rip off unsuspecting buyers and sellers, and one of the most common scams pulled off by these fraudsters in the real estate sector is the vacant property scam and the real estate wire scam.
Victims of such a scam not only suffer long-term financial loss but are also affected physically and mentally.
In this article, we will shed light on the real estate sector, including the vacant property scam and the real estate investment scams. We will also dwell on the red flags to watch out for and how to avoid becoming a victim of one such scam.
What is Vacant Property Fraud?
When a scammer fraudulently identifies and falsely claims ownership of it and then tries to sell it to unwary customers. Here are some red flags that you need to keep in mind while buying the property:
- Research the property: You shouldn’t open your wallet immediately after looking at the real estate, no matter the urgency that the seller might claim. When you choose a property of your choice, it is wise to verify and authenticate the owner’s records, cross-check for any liens, and lastly, if possible, physically inspect the property.
- Use trusted professionals: It is advisable to seek professional help by engaging the services of a reputed real estate agent, attorney, or title company to ensure the verification and authenticity of the transaction. As experts in their fields, they can quickly point out the red flags that you may not notice. They will also help protect your interests from a potential scam or fraudulent activity.
However, avoid any legal help or real estate agents recommended by the buyers; you cannot ignore the fact that if the seller is a scammer, their entire troupe may also tag along.
- Be cautious of the “deal of a lifetime.”: It is advisable that you have a rough estimate of a property and its surrounding area. If the deal looks impossible, then exercise caution and try to investigate it further. Most scammers would like to sell a fake property at a cheaper rate.
- Secure title insurance: Title insurance is one of the crucial factors that assures a safeguard against a potential vacant property scam. The title insurance also represents the ownership of the property, further safeguarding your investment.
It is advisable to seek out the local municipal office and cross-check the authenticity of the real estate, which is in fact under the name of the seller. Real estate investment scammers are known to keep themselves updated on the latest vacant properties on the market. They then forge fraudulent papers with their names on them.
So far, we have understood the critical factors that you, as a real estate buyer, should consider and spot when you go hunting for a real estate property.
We shall now take a look at real estate wire fraud, the red flags, and how to avoid becoming a victim of one such scam.
What is Real Estate Wire Fraud?
When a hacker intercepts communication through emails between buyers, sellers, and real estate professionals and tries to redirect funds to their accounts during the transaction. When you are in the transactional phase of the deal, you should consider the following precautions to minimize the risk involved:
- Secure communication channels: It is advisable to use encrypted email services and password-protected file-sharing platforms while communicating and sharing sensitive information. If you are in a public place, then refrain from using unsecured public Wi-Fi networks while transacting the amount related to any real estate.
Public Wi-Fi networks are notorious for having monitoring software installed by hackers. As soon as you open up your online banking app for any transaction, all the sensitive data regarding your bank account can get compromised as the data is directly sent to hackers. The chances of you falling victim to identity theft are also quite high.
- Verify wiring instructions: It is crucial that before you engage in a wire transfer of funds, you try to verify the wiring instructions independently. It is advisable to use known contacts rather than relying completely on the instructions given in the email. Scammers are known to impersonate legitimate parties to rip off their victims.
- Educate yourself and your team: You should create awareness among all the parties involved in the real estate deal regarding the risks and signs of potential wire fraud. Such steps will mitigate the threat of your funds being erroneously sent to the scammer instead of the seller. Such steps also ensure vigilance and look for a potential wire fraud threat.
- Confirm changes verbally: Should you make any changes to the deal or changes in the transaction details, then it is best to confirm them to the relevant parties verbally. Such steps help to avoid falling victim to a wire fraud scam at the last possible minute.
Final thoughts
Real estate investment scams and wire fraud are very serious threats that can have a lasting effect financially, physically, and mentally. You can ensure that you avoid falling victim to such scams by undertaking the steps that we have mentioned above.
By exercising due diligence, staying informed, and executing preventive measures, you will help mitigate the risk of these fraudulent activities.
