Buyers and sellers, and existing luxury property owners are all vulnerable to real estate scams. By being armed with information and tips, current and pending property owners canavoiding being victimized by fraudulent behavior.
Don’t Let Them Take Your Money & Run
Some of the most picturesque communities and desirable real estate in Florida is on the sunny panhandle stretch known as 30A. Luxury real estate abounds in all forms: condominiums, beach houses, cottages, bungalows, etc. As the real estate market makes substantial recoveries from the past several years, the business of scamming is also escalating.
Luxury real estate scams aim to take advantage of all types of property owners, which is why it’s best to not only work with a reputable local realtor but also to be advised of the types of scams that exist and how to avoid them.
The Workshop Scam
- What is it? – A fake educational seminar that can collect as much of tens of thousands up front for education and information; some also include an “opportunity” to spend more money to get started on an investment.
- Who is at risk? – Prospective real estate investors
- How do you spot it?–The initial course will be low-cost but will provide very little information; the real information –the information you supposedly need—is available in via a subsequent higher-level course that is much more expensive. You’ll typically have to sign a release waiver when you register, which keeps you from being able to reclaim any of your lost funds.
- How do you avoid it? – Do your research; Google the company or individual conducting the seminar. Inquire with a local realtor about the seminar’s validity. Read anything you’re asked to sign in detail. Use your common sense; if you pay a nominal fee and get no useful information but are being sold on another more costly seminar, you are being scammed; cut your losses and get out.
If you’re interested in investing, you can have an honest conversation with an area realty specialist who sells the type of property you are interested in buying. They can give you pointers and possibly suggest some contacts and reading material that will help you get started.
- What is it?–Typically rare and made possible as a result of identity theft, title fraud occurs when a stranger, former or current spouse, or other party is able to pose as the actual property owner, take out a mortgage against the property, and then escape with the money leaving the property owner with the mortgage
- Who is at risk? – Buyers and sellers (especially sellers who own their property outright); property owners who rent out their home; the elderly who are generally less savvy about such scams
- How do you spot it?–If you stop getting tax documents or other routine documents the property owner should receive, there is a chance you have been / are being scammed.
- How do you avoid it? – Title insurance will be your greatest line of defense. You should also avoid providing information to strangers over the phone; if a stranger calls you and advises your information has been compromised, do not provide information to them over the phone.
Though uncommon, title fraud does happen, and because it’s a byproduct of identity theft, if you’re the victim of title fraud, you’re likely to have bigger problems. Take practical steps to protect your information; talk to trusted entities about protecting your interests.
- What is it? – Lenders, appraisers, or home improvement specialists will over-aggrandize the value of a property or the cost of repairs to make you borrow more than you need, to refinance purposelessly, or to spend more than the home is worth.
- Who is at risk?–Property buyers and investors, and property owners
- How do you spot it? –Predatory parties will try to put pressure on you to spend money up front; they will try to convince you that they alone are the only way for you to finance a property or to complete repairs or to pay off debts. They will try to prevent you from shopping around and taking your time to make an informed decision.
- How do you avoid it? –Don’t let anyone pressure you into making a decision. Interview realtors; investigate those you are working with. Additionally, use your judgment…if something doesn’t feel right, it probably isn’t.
Sadly, there are other types of scams out there including rental scams and scams where parties will pose as government agencies. The best way to avoid being the victim of a scam is to (1) remember the adagethat if it’s too good to be true, then it probably is, and (2) to do your own research. Don’t let anyone pressure you into acting until you are ready. Do not put money down unless you are supposed to (for example, fake realtors will “sell” properties and will ask for their buyer’s commission up front.
An Internet search will help you find trusted names in your area; once you find a realtor you know you can trust and with whom you have a nice rapport, then you can consult them for guidance on who else you can and should work with in the area for other aspects of the home buying or selling process.
From palatial Mediterranean beach houses to upscale cozy cottages to decadent modern condominiums, the white sand beaches of 30A are littered with luxury real estate. Avoid being scammed and gain a trusted partner in the real estate industry by contacting coastal living real estate expert, Melissa Clements, your personal guide to all things 30A.