As home prices continue to rise and housing inventory remains low, scammers are targeting the real estate market in new ways. Whether you are a renter, buyer, seller, or homeowner, you should be aware of several common scams that have been reported in Maryland, and the steps you can take to protect yourself.
Scam 1: Online Rental Listings
How It Works:
A potential renter comes across an online listing for an amazing property at a very attractive price. The property description includes a long list of desirable amenities, but no photos and only an email address to contact for more information. When the property owner writes back, they are very flexible on payment terms and may even waive typical rental application costs and vetting. The only thing they will require from you is an advance payment of the rent or the security deposit to secure the unit. Once the renter sends payment, the property owner stops responding.
Steps to Take:
- Be wary of any rental listing that does not include information on the property’s address and a way to contact the owner or property manager by phone.
- Ask for photos of the unit, inside and out.
- Arrange a tour of the inside of the property instead of just driving by the outside. If the owner refuses a tour, that is a red flag.
- Do an online search of the property address and images, or even the listing text. It could be cloned from a legitimate listing.
- Do not send your personal information, bank account number or credit card to the owner, and do not wire funds to them, until you have verified the listing is legitimate.
Scam 2: Wiring Deposit Money
How It Works:
A buyer is in the final stages of closing on their home sale. To complete the sale, the title company requires the buyer to send the funds for the downpayment and closing costs by wire transfer. An email appearing to come from the title company arrives with the link to complete the wire transfer, which the buyer uses to send the funds. When the buyer shows up to closing, the title company says the funds never arrived. The email from the title company was fraudulent and a hacker has stolen the buyer’s money.
Steps to Take:
- Never send funds through a link in an email, even if the sender’s name looks legitimate.
- Always confirm your title company’s wiring information in person or over the phone in a call that you initiate to a number you have independently verified.
- Be careful opening attachments emailed to you as they may contain malware or other programs to steal your identity.
- Report any suspected wire fraud to your bank or financial institution immediately.
Scam 3: Vacant Properties
How It Works:
A person claiming to be the owner of a vacant property or undeveloped piece of land contacts a real estate agent to sell the property at a low price and preferring all-cash offers. They are unable to meet with the agent in person because they are currently traveling. The agent visits the property, moves forward with the listing, and engages with potential buyers. The alleged property owner develops a conflict with the closing date on the property but will use an online notary or power of attorney documentation to finalize the sale.
Steps to Take:
- If you are the buyer of a vacant property, have your agent and title company take steps to independently confirm the identity of the seller. This could include asking for a photo ID or mailing a confirmation letter to the property owner.
- Check the tax records of the property to determine if the owner’s name and address match that of the seller.
- Be wary of any seller that is unwilling to speak by phone or appear on video. A legitimate seller will be willing to prove they are the rightful owner to close a sale.
- If you are an owner of a vacant home or parcel of land, set up an online alert for your property address so that you will know right away if someone has listed it for sale without your permission.
- Have a trusted friend, neighbor, or real estate professional stop by your property on a regular basis to look for any suspicious activity, like unauthorized posting of real estate signs or survey markings.
If You Believe You Have Been a Victim of These or Other Scams:
Time is of the essence. Contact your local law enforcement and your bank or financial institution as first steps. You can also submit information on scams to the Maryland Attorney General’s Office of Consumer Protection and the Federal Trade Commission.
