Real estate fraud has been on the rise over the years and knowing how to avoid being scammed is becoming of the utmost importance for homebuyers. Fortunately, there are a few steps that you can take to make sure that you don’t find yourself as a victim in someone else’s real estate scheme. Below are a few things that you can do to protect yourself from financial loss due to real estate fraud.
Watch out for “hurry and buy before it’s gone”
Be aware of pressure to act quickly. As the old saying goes, if it sounds too good to be true, then it probably isn’t. One way that real estate scammers lure their victims is by using time to leverage them into taking action. If you are pressured to act quickly because you are told that you are going to miss out you may want to cool your heels on the deal.
You should never feel as though you have to do something right away in a real estate sale, especially when it involves the largest purchase that you may ever make. Being told to hurry and purchase a property can make you feel like you are getting something before it goes away and that is exactly why scammers use the technique.
However, rushing into purchasing a property can leave you very vulnerable without time to purchase title insurance to protect yourself. As a result, the unknown liabilities that you could open yourself up to might have you end up with more than you bargained for in the beginning.
Don’t wire money to a third party
Another scam that is used is getting a potential homebuyer to send money to purchase the home to another party usually via wire transfer. If you are asked to send money to an external party who is controlling the deal it may be a bad sign. In many cases the third party does not exist or can be someone who is partnering with the scammer.
Going along with a real estate purchase that requires you to send a payment from a wire transfer without doing your due diligence can lead you on the hook for a payment that could disappear once they get it.
Purchase title insurance
Given that the two methods above can leave you extremely at risk for financial loss, the best way to protect yourself in any real estate deal is to make sure you have some title insurance which guarantees that you won’t be held liable for any financial obligations against a property.