The real estate market is one of the most competitive ones and finding a property house that you like and that fits in your budget can be difficult. When you do find the right property for yourself, there’s always the temptation to act quickly before it goes off the market. However, fraudsters are often on the lookout for conning potential home buyers. According to the FBI, there has been an increase in real estate scams and in 2021, people lost $350,328,166 to these scams. Here we share with some useful insights on how does home title theft work and how to avoid a real estate scam
How does home title theft work?
Home title theft — also called title fraud or deed theft — occurs when fraudsters steal your personal information such as bank details or Social Security Number to misuse it and transfer the home’s title into their own name. Once the property is transferred to their names, they can resell it without your permission or obtain a home equity line of credit or rent the property and pocketing the rental income.
Here are some tips to avoid a real estate scam:
1. Don’t buy or rent a property in haste: Finding a property to buy is no easy task. Sometimes it may take months to find the right property. So when you find a property that’s too good your instinct will be to buy it without any delay. You may not want other potential buyers to outbid you. However, as property is a huge investment, it is always advisable to do due diligence before going ahead with the purchase or lease agreement
2. Verify the credentials of the landlord: Just because somebody says that they are the owner of the property and can rent it to you does not mean they are. Do your homework to ensure that the person you are dealing with is genuine. You can ask a property seller for Identity proof and address proof. If you are buying a property, buy title insurance because they will take on the duty of verifying the ownership history of the property. If they get it wrong, they must pay to fix the situation.
3. Use a verified real estate agent: When buying a property through real estate agents, always use services of a well-known real estate agent. If you don’t know any real estate agents, go for reputed property sites. Before working with real estate agents, always read online reviews and speak to homebuyers they have worked with.
4. Do not close the deal if you have any doubt: If the property that you are planning to buy is available at unusually low price, the seller is not willing to show the property documents or the seller is not letting you visit the property, often these can be some red flags that you should be worried about. In any of such situations, it is best to not transfer any funds to the seller until you are satisfied that there’s nothing wrong with the transaction.
5. Never pay cash: Scammers may trick you into making payment in cash by saying they are offering a price much lower than the selling price of similar homes in the neighborhood. The drawback with paying in cash is the transaction cannot be traced like a wire transfer. If the seller or the real estate agent is forcing you to make a cash payment, you need to walk back from that deal immediately.
6. Hire a property attorney or buy title insurance to check the title deal: Real estate transactions are not as straightforward as they seem. There are many laws responsible for regulating real estate transactions, and they vary from one state to another. Therefore, it is important to hire a property attorney. From ensuring that the property has a clear title and there are no outstanding liens or mortgages against the property to representing your interests at closing, a licensed property attorney can help you make sure proper procedures are followed during the acquisition or sale of property.
If you are in California and searching ‘property attorney near me’ online, consider David L. Fleck. An attorney with decades of experience, Mr. Fleck has handled many cases of real estate frauds as well complex financial crimes. He has secured courtroom wins for individuals and businesses that suffered fraud. To get in touch with him, send a message here.