Price
11000000+ USD
Lot Size
0100+ acres
Home Size
010000+ ft2
Get instant customized notifications for the properties you’re looking for.
Alertik iOS Alertik Android

8 Major Scams in Real Estate - What You Need To Look Out For

Articles

Published on Saturday, December 05, 2015 by Land Century

Real estate is a major industry that is susceptible to scams just like any other industry in the world. When you go to buy land or a property, it’s important to know what current scams are being conducted.

Unfortunately, there are many that the average person would fall for unexpectedly.

You need to know what to look out for so that you don’t get scammed in the process. We’re going to take a look at the most common scams the real estate industry is currently experiencing.


  1. Document Forgery




One of the biggest scams (and longest running) deals with document forgery. There are still those that will forge documents to make it look like they own a piece of property when they don’t. And, these people often ask for cash from the buyer who later finds out that he has been scammed when he’s kicked off the land by the property owner.


  1. Illegal Flipping




Depending on your local jurisdiction, there may be rules in place that do not allow illegal flipping of a home to occur. A good example of this would be:

- Buying a home for $120,000.

- Selling the same home for $240,000.

The problem is that homes can’t be purchased and resold quickly for prices well above the appraised value of the home without justification. This ensures that a wealthy investor can’t buy all the homes in the area and resell them for unrealistic prices, effectively monopolizing the real estate market.


  1. Fraudulent Loan Origination




There are times when the buyer knows they really can’t afford a mortgage, but they’ll do anything to land the property. Lenders are supposed to safeguard these ill-advised investments for both the borrower's and lender’s sake.

Real estate professionals that offer to help unqualified individuals get these loans is running a scam.

Usually, the agent will try to get a person into an FHA-insured mortgage and may even falsify documents to get you in the home. It’s not in your best interests to own a home or property that you simply can’t afford.


  1. Short Sale Fraud




There are primary and junior lenders that end up involved in short sale fraud. Primary lenders put a cap on junior lenders. But, the sale of the home cannot go through unless all junior liens are satisfied.

Junior lenders are not happy about having their payments capped, which can result in fraud.

Many junior lenders will ask for money that’s outside of escrow and payments that are never disclosed to the primary lender. Disclosure is the easiest way to stay safe against this type of fraud. All payments made to a junior lender must be disclosed as part of the short sale transaction.

Otherwise, you’re part of the fraud that occurred if you’re the buyer paying payments that weren't disclosed.


  1. Misrepresented Property Listings




Statistics show that 9 out of 10 people will look online first for real estate before going to see a home in person. The problem is that many sites, such as Craigslist, will have homes for sale, and when you arrive, you’re not at the same home that you saw in the listing.

Usually, you’ll be told the property is no longer available, and that’s why you’re at the current property.

When you enter the home, you’ll find out that it’s more expensive, may be smaller, or needs a lot of work. The short way to remedy this problem is to never waste your time with a property that was misrepresented from the start.


  1. Wire Fraud




Wire fraud is a common occurrence and should never occur in today’s real estate industry. What happens is that the real estate agent or seller will ask you to wire them money to hold the property on your behalf.

The problem is that many scammers will use this tactic when they don’t own the home.

You may find that the land or home is owned by another individual, and the scammer gained access to the property. The moral of the story is to never wire money to a landlord or seller unless it has been legally verified and documented.


  1. Scammers Posing as Owners




When dealing with property, many scammers will pose as owners and try to ask for a cash sale. Imagine an unused, empty lot of land that is in Florida. If the owners never visit the property, what is stopping a scammer from posting the listing online and trying to sell the property to you?

You’ll never get the deed to the property, but you will be asked to provide payment.

A false deed may even be forged and handed over to you. The issue is that land may be an investment someone is holding, and the owner may not visit the property for years. If you fall into this scam, you may even think you own the land and may start utilizing it before finding out you’ve been conned.

The best way to fight back against this fraud is to do your due diligence.

Find out who owns the land by going to your local county clerk’s office and verify that the seller of the land actually owns the property you want to buy.

If the seller is rushing you to buy the property right this moment in cash, chances are that something is amiss.


  1. Phony Seminars




You’ve been invited to a seminar where you may even be promised a free gift to attend. The seminar intends to teach you about the world of real estate investing, and the initial offer sounds so good that you wouldn’t dare pass it up.

There are two things that can happen here:

- You’ll need to pay more for insider secrets and another seminar that will show you how to profit off of land.

- You’ll be pushed into a “hot” investment opportunity to buy land, but you need to take advantage of it now before someone else does.

Unfortunately, these seminars are fly-by-night operations that will steal your money without you learning any proven investment techniques or owning property that you paid for legally.
Share this Article
New Construction Project for 56 Unit Townhomes in Titusville, Florida

EXECUTIVE SUMMARY 5.54 ACRES / R-3 ZONEDLocated on 5.54 acres in the heart of The Beautiful Overlooking the Indian River City of Titusville, Florida. 4.178 acres zoned R-3 (Residen...

Featured Listings

10 Acres
Sierra Blanca, TX
79.95 Acres
Eureka, NV
5.54 Acres
Titusville, FL
0.23 Acres
Dunnellon, FL
1 Acre
Willcox, AZ
0.3 Acres
Shelter Cove, CA
1.68 Acres
Sanders, AZ
0.23 Acres
Coldspring, TX
5 Acres
Blanca, CO
0.23 Acres
Port Charlotte, FL
108 Acres
Eagle Lake, ME
0.16 Acres
Ridgecrest, CA
Waterfront Liquidation - Own Waterfront Lot Today! Tennessee's most popular camping place!

ENJOY WATERFRONT PROPERTY FROM ONLY $12,800Camping is one of the most America activities you can do. One of the most beautiful places we visited is located minutes away from Tennes...

Live Your Dream: Start Your Own Business With Perfect Package! 260 Arizona Lots Ready for Land Wholesaling Opportunity! Buy & Flip with LandCentury.com Network!

Western Paradise location offers up to 500% profit potential The easiest way to start your land flipping businessWe give you the platform, you earn the rewardsLandCentury, one of A...

Featured Profiles

Verified Wholesaler

Harris Investments, LLC

Verified Wholesaler

GreenBridge Holdings, LLC

Verified Wholesaler

Land Century, LLC

Verified Wholesaler

BuildFortune, LLC

108 ACRES OF LAND NEAR EAGLE LAKE, MAINE IS READY FOR YOU!

We have an exciting opportunity to own land near Eagle Lake, Maine. 108 acres parcel of beautiful, untouched stretch of natural forest is located in New Canada, Maine near Eagle La...

Great development opportunity in The Enclave at The Palms, Northern Belize!

The Enclave at The Palms is a residential subdivision located in the Corozal Province in Northern Belize. This part of the country is very popular with expats, and The Enclave is l...

Be Smart, Live Well in North Port, Florida! Great opportunity!

North Port, Florida, is the place you have been waiting for. One of biggest city in Sarasota County, North Port still feels more like a small town and people hope to keep it that w...

120 acres for sale in beautiful Sierra Blanca, TX

Have you ever imagine yourself in the role of Texas cowboy in popular western movie? Where is just you, desert and wild nature? Or you were dreaming of build your own big rancho wi...

Unique Development Opportunity in Butler Bay, St. Croix, United States Virgin Islands!

Do you believe that dreams come true? That there is paradise on the Earth? That there is a place where you can escape from cities and just enjoy nature how it is?One of this places...

Unrestricted Land - What Does It Really Mean?

Unrestricted land usually means that the land doesn't come with the same restrictions homeowner's associations impose, like home size, color or style. You may be able to place a mo...

Featured Listings

10 Acres
Sierra Blanca, TX
79.95 Acres
Eureka, NV
5.54 Acres
Titusville, FL
0.23 Acres
Dunnellon, FL
1 Acre
Willcox, AZ
0.3 Acres
Shelter Cove, CA
1.68 Acres
Sanders, AZ
0.23 Acres
Coldspring, TX
5 Acres
Blanca, CO
0.23 Acres
Port Charlotte, FL
108 Acres
Eagle Lake, ME
0.16 Acres
Ridgecrest, CA
What are Tiny Houses and Are They Worth It?

Tiny houses are taking the world by storm. A lot of people are selling their larger homes and building or purchasing a tiny home. And they’re saving a lot of money in the process...

How Much Does It Cost to Build a House Yourself?

Imagine being able to build your dream home with your own two hands. As romantic as it sounds, building a home takes a great deal of time, work, dedication and skill. But if you ha...

Featured Profiles

Verified Wholesaler

Harris Investments, LLC

Verified Wholesaler

GreenBridge Holdings, LLC

Verified Wholesaler

Land Century, LLC

Verified Wholesaler

BuildFortune, LLC

What are Real Estate Investment Trusts and How Do They Work?

When it comes to real estate investments, you'll see a lot of people talking about REITs, or real estate investment trusts. Some people call them "real estate investment stock."The...

Business Ideas for Vacant Land - How to Create Income Producing Assets

Vacant land can become an income producing asset. Land is valuable, and while land may be most valuable when a structure is built on it, this doesn't mean it can start producing in...

How Blockchain Could Change the Real Estate Industry

You've heard of cryptocurrencies – unless you've been living under a rock – but you're not sure how they work. Bitcoin, the world's largest cryptocurrency, is run on what's cal...

What Does the Right of Refusal Mean in Real Estate?

The first right of refusal in real estate is a provision an agreement or lease that gives a potentially interested party the right to buy the property before the seller negotiates...

Avoid Being Scammed on Craigslist and eBay When Buying Property

Just about anything you can imagine can be bought and sold on eBay and Craigslist, from old toasters to vintage record collections, and yes, even property. While these sites have c...