Real estate fraud involves many aspects of real estate, such as the purchasing, selling, and financing of properties. During these scams, fraudsters attempt to steal property, money or even personal details they can misuse from people involved.
This type of fraud can cost you a lot of money as well as emotional damages. If you’re involved in real estate fraud, you’ll want to tackle it quickly but effectively so that you protect your interests.
If you’re wondering how to do that, read the rest of this article. We feature the different types of real estate fraud to know about, how to identify real estate fraud, how to prevent it, and what legal remedies are available to help you deal with it. We’ll also look at why hiring a real estate lawyer is a good move.
What are Common Types of Real Estate Fraud?
Real estate fraud can occur in various ways, with the most common including the following.
Mortgage Fraud
In this fraud, scammers target lenders, attempting to misrepresent information to acquire mortgage loans. This can be a way to steal the loan money or to occupy a property: the scammer might lie about their finances to gain access to the property, but then not afford the mortgage payments.
Title Fraud
Title fraud refers to illegal property ownership. A scammer will steal the owner’s title, usually with a forged title deed or by pretending to be the property owner.
Rental Fraud
This involves scammers posting fake or duplicate property listings to lure tenants. Once they receive a deposit for the rental property, they will steal the money and disappear.
Investment Fraud
The fraudsters will advertise a property to investors, making it seem highly appealing. It might not exist, or the property construction will be neglected halfway through the building project. The result is that the victim of the fraud doesn’t receive their money or property, with nothing to show for their investment.
How Can You Spot Real Estate Fraud?
There are some common red flags to be aware of when it comes to real estate fraud.
- The property prices advertised are much lower than their market value. This can be used as a way to try to lure victims to the property.
- The agent selling the property doesn’t provide much information about it.
- The scammer wants you to pay for the property via uncommon payment methods, like wire transfers.
- There’s a lack of communication. This is especially obvious when you want to query something, as you’ll find the other party isn’t responsive.
- There’s incomplete documentation.
- Real estate professionals don’t have licenses.
How Can You Prevent Real Estate Fraud and Scams?
By taking your time and doing your research, you can prevent many types of real estate fraud from affecting you.
Practice Due Diligence
Before you agree to a real estate deal, you should try to gather as much documentation as you can (such as title deeds and contracts) about it. Ask a lot of questions, and try to learn about any concealed issues, such as by ordering property inspections.
Check Licenses
It’s important to ask people for your licenses before you agree to work with them. If they hesitate to show you their credentials and licenses, it’s a red flag.
Look for Online Property Listing Red Flags
It’s common for online property listings to display red flags, such as poor or blurry photos, vague or incomplete property descriptions, and suspiciously low prices. There might also be photos that seem edited or don’t show you much about the property.
Never Pay Everything At Once
It’s common for scammers to request upfront payment, but you should avoid this. To get their way, they might make promises of amazing deals you don’t want to miss, such as with property investments. These are pressure tactics to get your money. It’s always better practice to have payment schedules outlined, so you can pay over time.
What Should You Do if You’re Dealing with Real Estate Fraud?
If you’re the victim of real estate fraud, you should follow some important guidelines so that you avoid further losses.
Report the Fraud
For criminal acts, you’ll want to file a report with your local police so that they can launch an investigation. You should also report the fraud to real estate associations, such as the National Association of Realtors (NAR).
Gather Evidence
You should collect evidence of the real estate fraud or scam, such as any names or identifying information you have of the scammer, what losses you’ve experienced, text messages, or fake online property listings.
This will help you when you report the incident and can help your lawyer build a case.
How Can a Lawyer Help You with Real Estate Fraud?
It’s best to connect with a lawyer for assistance with real estate fraud. They will be able to help you throughout the process of filing claims and fighting for your rights, while also ensuring you choose the best legal recourse for your specific situation.
Here are some specific ways in which a lawyer from ContractsCounsel, an online legal network connecting clients with vetted lawyers, can help you with your real estate fraud case.
- They’ll identify the type of fraud you’re dealing with.
- They’ll assist you in gathering evidence to support your case.
- They’ll review any real estate contracts for vague or complex clauses, while reminding you of your rights.
- They’ll help you understand the local laws and ensure your compliance with them, preventing you from legal risks.
- They’ll assist you in court, if legal action is recommended. They’ll gather evidence for your case and represent you in court.
- They can negotiate with the other party to achieve a good settlement.
Do you need a lawyer for real estate fraud?
If you’re dealing with real estate fraud, you should contact a lawyer on ContractsCounsel. They’ll help you support and strengthen your case, explore legal remedies, and assist you in every step of the process so it doesn’t feel overwhelming.
