Buying a home is a significant milestone often filled with emotion. Unfortunately the bad actors prey on this emotion and excitement so it’s crucial to stay vigilant against scams. Let’s dive into some common real estate scams, how they work, and how you can protect yourself.
Wire Fraud (stolen down payments and closing costs)
Imagine you’re all set to close on your dream home. Suddenly, you receive an email that looks like it’s from your real estate agent, providing new wire transfer instructions for your closing funds. You follow the instructions, and poof — your money vanishes into a scammer’s account.
How to Protect Yourself:
- Be wary of last-minute changes to wire instructions and always verify the instructions by calling your real estate agent.
- Use encrypted emails for any sensitive information.
- Always check the sender’s email address to ensure it’s not a spoof account. Look for additional characters, spelling mistakes or other inaccuracies.
- Use a cashier’s check or an escrow service when wiring funds.
Deed and Title Scams
In a deed scam targeting buyers, scammers forge property deeds and sell homes they don’t own. You might think you’re buying a legitimate property, only to find out later that the deed is fake and the seller had no legal right to sell the property.
How to Protect Yourself:
- Hire a reputable real estate attorney to review all documents.
- Conduct a thorough title search to ensure the seller is the rightful owner.
- Purchase title insurance for added protection.
- Once you have purchased a home, consider signing up for identity theft protection that monitors your home title.
Moving Company Scams
You’ve found a moving company with a great quote, but on moving day, they demand significantly more money, holding your belongings hostage until you pay up. This bait and switch tactic can turn your moving day into a nightmare.
How to Protect Yourself:
- Research and read reviews of moving companies before hiring.
- Get quotes in writing and ensure they include all potential charges.
Red Flags to Look Out for:
- Requiring a large deposit or cash payment upfront
- Answering the phone with “movers” or “moving company” rather than a specific name
- Asking you to sign a blank contract or one with vague terms
- No physical address for the company
Real estate transactions can be complex, but staying informed and cautious can protect you from these common scams. Always verify information, work with reputable professionals, and trust your instincts. Your dream home should come with peace of mind, not the stress of falling victim to fraud.
About Michigan Mortgage Lender, Julie Krumholz from Superior National Bank
With over 35 years of experience in the mortgage industry, Julie Krumholz from Superior National Bank is a trusted resource and friend to homebuyers. Julie has worked in processing, closing, loan origination, underwriting, and QC auditing and has even co-owned a mortgage brokerage firm. Julie applies her knowledge to help first-time and seasoned homebuyers with a seamless homebuying experience.
