Smart Investors: Three Real Estate Scams You Should Never Fall For

“Honesty is a very expensive gift. Do not expect it to come from cheap people.” –Warren Buffet

 There has never been any doubt that succeeding in real estate takes hard work, determination and commitment.

 It is not some get rich quick scheme as some have been misled to believe. It takes laborious work to see any real results and unfortunately, not all individuals in the industry are prepared for that kind of dedication just to succeed. Resultantly, some would give up with the belief that they are not cut out for that kind of line of work while the rest would resort to sleazy machinations just to guarantee a sale.

 From there, all sorts of scams and fraudulent schemes are cooked up and it is unfortunate that there are investors (especially novices and first-timers) who would be none the wiser and would buy into the scam. No doubt, the real estate industry is a sector that can be extremely profitable. But as it was stressed above, it requires hard work and unfortunately, some people are not willing to put that kind of effort.

 As a smart investor, it is your responsibility to be aware of what the most common real estate scams are and avoid falling prey to it. Year by year, notorious fraudulent practices in the sector become more prevalent and at times, they can be rather hard to detect. So, before you proceed with a deal, you need to be a 110% sure about its legitimacy. Whether you are buying a property in Arca South or elsewhere, always demand for the necessary documents. In any case, here are some of the most common real estate scams you ought to avoid:

1. Title fraud
   Although relatively rare, if a scammer is really creative, he or she may resort to this kind of scheme. As this is creatively executed and would require a lot of patience and research on the scammer’s part, the results are often devastating to the property buyers. It starts with identity theft and from there; they would falsify documents to pose as the property owner. Then they would register the forged documents and transfer the property to their name and get a new mortgage against the property. Once a mortgage is secured, the scammer would then leave with the cash and the owner liable for future payments.
   
   
2. Bait and Switch Scheme
   Another scam that is quite prevalent today is the bait and switch scheme. Basically, the scam takes place when a potential buyer would offer an “above market value” price to a home seller. Enticed by the exorbitant offer (that would often exceed way beyond the asking price), the owner would then agree to the deal. Unfortunately, the unsuspecting seller has no idea that the unscrupulous buyer would not purchase the property at the price offered. Once the seller has signed the contract, the seller can only sell to that buyer for a specified time. Should such time end, the fraudster would then ask for a series of extensions until the buyer would ultimately tell the seller that the price no longer works and to reduce the price way beyond market value. More often than not, the threat of cancellation if a demand is unmet would be thrown around until the seller, exhausted from the passage of time without a sale, would agree to said reduction.



3. Rental Scam
   With modern innovations and technological breakthroughs such as the Internet, people now have the avenue of selling their homes to individuals who do not even live in the same zip code as they do. Unfortunately, this ease of convenience has been exploited by fraudsters as well. Tech savvy scammers would often select actual listings and post it on their own websites and claim it as their own. When an unwary investor comes upon their pages, they would often be asked to wire the money to a third party first but unbeknownst to them, no sale has actually occurred.

Author Bio:

 I am is a freelance writer, blogger and a business enthusiast. I love also to travel and explore new things. I just find myself happy with the simple things and Appreciating the blessings God gave me.