Real estate deals are the largest transactions most individuals engage in. While most go smoothly, getting caught up in a scam could cause you to lose your life savings and spend years in court trying to recover. When considering a real estate deal, know how to spot and avoid these common scams.
Most people are aware that real estate brokers sometimes come up with new, creative names for traditionally less desirable neighborhoods. What they may not realize is that sellers often lie about the actual address of the property.
This is often the case when bordering neighborhoods are located in different zip codes or use different city or town names in the mailing address. When the property values in one zip code or town are substantially higher than the other, the seller may use the incorrect information in the listing to drive up the selling price.
To avoid this scam, always confirm the actual address with the United States Postal Service as well as local government records.
A straw buyer is used when the true buyer can't qualify for a home purchase due to a low credit score or other reasons. The straw buyer signs all of the documents as if they were buying the home while the true buyer moves into the home and makes payments.
Unlike with having a cosigner, where both parties are on the mortgage documents, a straw buyer is highly illegal because they falsely claim they will be living in the property and making payments while the identity of the true buyer is hidden.
Often, the true buyer will eventually stop making payments and the true buyer won't actually back the loan. This can be disastrous if the deal was privately financed by the seller or if the seller hasn't received full payment from the mortgage lender.
Scammers often attempt to sell properties that aren't theirs, such as a home left for the winter by a snowbird or an otherwise abandoned property. They may even create a false deed to back up their claim of ownership.
For this reason, it's important to have a real estate attorney to conduct a full title search before closing a deal and to back out of a deal if past sale records of the home seem suspicious.
To help protect yourself in a real estate deal or to recover losses you suffered due to a scam, contact a local real estate attorney like Levin & Levin, LLP - Attorneys at Law today.