In a perfect world, consumers – especially those engaging in very large transactions like buying or selling real estate – would never have to worry about being scammed.
But we don’t live in a perfect world. Far from it. Scams are everywhere.
The sad fact is that criminals are getting savvier by the day with respect to targeting and scamming various consumers. Statistics from the FBI’s Internet Crime Complaint Center show that in 2018 11,300 people fell victim to real estate fraud – with total losses of more than $419 billion. You simply must, then, know how to spot a real estate scam in Boston. And a great way to do that is to understand some of the major scams.
ESCROW WIRE FRAUD
This real estate scam in Boston involves scammers stealing the escrow money. It typically works like this:
- You get an email, a phone call, or a text message from some person claiming to be affiliated with the title or escrow company.
- The person then gives you instructions about where to wire the escrow funds.
- You wire the funds to the given online destination.
- The scammers/thieves then disappear with your money. (And your options for and chances of getting it back are slim to none.)
The fraudsters in this real estate scam often set up bogus websites that look a lot like the title company’s or the lender’s site, and so they seem to be completely legitimate.
These people also use certain spoofing tactics to make URLs, email addresses, and phone number look familiar (with only slight, almost unnoticeable differences), so no red flags are raised for the unwitting victims.
To spot and protect yourself from this real estate scam in Boston, review the original documents form the lender and call the phone numbers given to verify everything before you send off any money. Double-check everything.
It is out of the ordinary for anyone in a real estate deal to ask you to send money online. Senior Economist with First American Financial Corporation Odeta Kushi advises being “wary of any email or text requesting a change to wiring instructions you already have.”
FORECLOSURE RELIEF SCAM
Another common real estate scam in Boston is the foreclosure relief scam. Sometimes, and often for reasons beyond their control, people run into extreme financial hardship and fall behind on mortgage payments. Without forbearance options, they are then desperate to avoid foreclosure and keep their homes. And that’s when the scammers rush in to take advantage of that desperation and financial vulnerability.
The scammers here get access to the public records of homes in pre-foreclosure and offer bogus foreclosure relief. They offer to save the home and lower the mortgage payment if the homeowner just sends them a hefty up-front payment. They get the money, and then nothing ever happens – except that the homeowner is worse off than she was before.
So if foreclosure seems imminent, you should, according to industry watchers, work directly with your loan servicer to modify your existing loan, request forbearance, or make other arrangements. If you get a call about this from someone who tells you not to talk to your lender, definitely beware. That’s a sure sign that you have got a scammer on the line.
LOAN FLIPPING SCAM
Another real estate scam is the so-called loan flipping scam. What happens here is that a predatory, unscrupulous lender contacts a homeowner and persuades her to repeatedly refinance the mortgage, many times by borrowing a larger amount at each refinance. The victim gets stuck with high fees and points each time while being tricked into borrowing most or all or her home’s equity.
The people most vulnerable to this real estate scam in Boston are older people who have significant equity, but who also suffer from cognitive impairment or physical disability. Predatory lenders convince homeowners they can help them find a better loan product or use a cash-out refinance to pay for home renovations to make their homes more accessible as they age in place.
Beware of lenders who seek you out, contacting you out of the blue, when you haven’t requested or indicated that you need or want their help. You should also deal only with known and reputable banks and mortgage companies. If you are contacted by a financial institution that you don’t recognize, it’s a red flag.
UNLICENSED REAL ESTATE AGENTS
Most realtors are licensed and committed to providing great service, but as with any profession, there are always a few bad apples in the barrel. And those bad apples are unlicensed realtors who sell property. What they do is, on selling a home to a buyer, deposit the escrow check in their own account instead of the escrow account. So the buyer is out the money, and the deal falls through.
A good way to spot and avoid this real estate scam is simply to check out the credentials and reputation of the agent in question. You should, for that matter, vet anyone you will be working within a real estate transaction.
Having a good real estate agent in your corner is probably the best way to spot and avoid a real estate scam in Boston. That’s where we come in! At NextHome Titletown Real Estate, our agents have years of experience selling and buying properties throughout Greater Boston, all are Realtors® and abide by a strict code of ethics, and our Managing Broker Rory Gill is also a Licensed Real Estate Attorney. When you have a good agent, she will always be looking out for your best interests, whether you are a buyer or a seller.
So if you’re ready to find a good agent who will help you avoid any real estate scams, contact us today! (617) 657-9811
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The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.