Be Careful With These Common Real Estate Scams
If there’s anything of value in the world, there’s bound to be people trying to steal it. The same holds true with real estate. Yes, real estate scams are quite common in Florida. Here are some of the more common ones, so you can be on the alert and know what to look for.
Transferring title to your home – Often, scammers will convince you to change the title on your home to their name, or even into a trust. They may try to sell you on the benefits of doing this, telling you that it is foreclosure-proof, or bankruptcy-proof, or that creditors won’t be able to get to the property.
These promises are largely false, and aside from being false, transferring title of your property into a trust can often be very dangerous. You can actually lose tax benefits, asset protection, or inheritance rights by transferring the property.
One caveat: Sometimes, a legitimate estate planning attorney may advise you to do something like this. But an actual licensed estate planning attorney advising you of the benefits of transferring title of a home into a trust or somewhere else, is much different than a company or “advisor” who is not an attorney, telling you to do this.
Escrow Money – Another common scam is where someone in the course of a real estate closing, pretends they are escrow agents. They may tell you that you need to deposit funds into an account, in order for the property to close. They may tell you there is some problem that requires depositing funds into escrow.
Unless the request comes from your own real estate attorney or he or she verifies the legitimacy of the deposit, be wary of anybody telling you to deposit funds in any escrow account as part of your closing.
Rentals – With both rentals, and Airbnb properties, scammers will often take a picture of property, post it, and pretend that they own the property, and thus can rent it out to you. But they own nothing, and they have nothing to do with the property. All they do is post a fake picture, take your money, and when you go to the property, you find that whomever does own the property knows nothing of your “rental.”
Refinancing – Many unscrupulous lenders will sell you on the benefit of refinancing. They may say that refinancing will lower your monthly payments, or that it will have some other benefit. But in the course of refinancing, you are paying other fees and costs associated with the closing. On top of that, the new loan may be worse than your first one, with harsher late penalties or more interest—exactly what you were trying to avoid.
As a general rule, always avoid buying or renting any property where (1) the process seems too good to be true, (2) you aren’t able to actually visit or see the property in person, or (3) where the seller insists on an only cash deal.
Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today to help ensure your real estate closing is problem free and safe.