Top 3 Real Estate Scams Exposed


Recessions can bring out the worst kinds of real estate scams that can harm the most financially vulnerable. With so many properties in foreclosure, people who are eager to take advantage of others are using real estate scams to bilk people of their money. Here’s a list of the top three real estate scams to watch out for:

Fake Landlords

Fake landlord scams usually involve renting foreclosed properties to unsuspecting victims. The scammer scouts a neighborhood for foreclosure properties that have been abandoned. He then gains access to the property, and posts fake rental ads on free websites, such as Craigslist. Below are a few of the signs that you’re dealing with a rental scam:
  1. There’s usually an absentee owner. This absent landlord will ask you to wire him money, and will promise to send you the keys through the mail. This is the first sign that you’re actually dealing with a scammer. Legitimate landlords won’t ask for money wire transfers.
  2. You’re not able to view the property. If a “landlord” is not willing to show you the property that he’s offering for rental, be very wary.
  3. The property is in foreclosure. Check with your county courthouse to see if the property is in foreclosure. If it is, run away fast.

SEE ALSO: Rent or Buy in These Popular Cities in the US?

Timeshare Sale Scams

Timeshares allow you to purchase rights to use a vacation property for a set number of weeks each year. In theory, timeshares are beneficial if you frequently vacation in a certain locale. However, many timeshares are sold using high pressure tactics and outright deception. How do you know if you’re dealing with a timeshare scam 
  1. The price of the timeshare is significantly higher than the actual value. Use resources, such as theTimeshare Users Group, to find out what the timeshare sold for the last time it changed ownership. You can also hire a timeshare appraiser to discover the value of the property.
  2. The contract is different from what the sales agent promised. Take the time to review the timeshare contract in detail with a professional. Never feel pressured to sign a contract during or right after a sales presentation.
  3. The timeshare hasn’t been built yet. Find out if the developer is legitimate, and what recourse you have if he fails to complete the project.

Timeshare Resale Scams

There are a large number of timeshare owners who want to unload properties, but there are few buyers.  This has created an environment where scammers thrive. Below are a few signs that you’re dealing with a timeshare resale scammer:
  1. They want you to pay an upfront fee. Preferably, you should never pay a fee to resell your timeshare. But if you do, it should only be after you’ve transferred the deed to the buyer.
  2. The reseller is not a licensed real estate agent. Only deal with agents who are licensed to sell real estate in the state where the timeshare is located.
  3. The reseller is promising to sell your property even though you’re behind on payments. In reality, it will be impossible to resell your timeshare unless your payments are current and you have a clear title.
If you’ve been scammed while trying to rent, or buy/sell a timeshare, contact the FTC and file a complaint.

SEE ALSO: Top 5 Countries for Buying a Second Home

Date of original publication:
Updated on: November 10, 2015

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