Last month we posted about the Utah Division Of Real Estates Fraud Alert sent to all licensed Real Estate Agents, Appraisers, and Lenders. Here is an update on some additional types of fraud occurring since our last post.

Credit Score Piggy-backing

You want to purchase a home but your score is below 620. You speak to a credit repair person and they suggest you piggy-back off another persons credit to bring your score up. Some say it is. It's simple to do. Just convince someone with good credit to add you to their credit card accounts so their good payment history shows on your record. The increased score can be significant and quick.

It surprises me that any person who has worked hard to build a high credit score would jeopardize their credit history by adding someone who can't handle money to their account.

Is it Fraud? Some say it is. It is done to increase the credit score of someone who has not earned the high score? Does it put a lender at risk for granting credit to someone they would not grant it to if they had the accurate history. Would you consider it fraud if you were the lender?

Be smart, don't get involved in this deceptive game.

Unlicensed Agents Marketing Built-in Equity

I was prospecting for listings last week and came across a "For Sale By Owner" on Craigslist that was a clear case of fraud. The ad Stated:

"$300k Instant Equity on a home for sale in Suncrest. An appraisal is available for complete details on this home. The home can be purchased for $825,000 and the appraisal is for $1,125,000. Great for an investor or someone looking for their own home. For further details on this home or other homes with equity contact me for further information"

I called what I expected to the the owner and found an unlicensed person selling equity opportunities. He suggested that because of the built-in equity I could purchase one of his opportunities and actually get money back at the closing.

Before he would give me property details he required I sign a non-circumvent agreement so I didn't go around him to these great opportunities. After I signed the agreement he emailed me 3 properties and their appraisals. Each was presented as having huge built-in equity. None of them were listed on the MLS but he assured me he had agreements with the owners to sell at his bargain prices.

Protect Yourself - Always Use A Buyers Agent

What is the best way to make sure you do not get lured into one of these types of scams? Align yourself with a qualified agent to represent you in any purchase of real estate. Don't think you're going to save a few bucks by going direct to a seller or even a sellers real estate agent. Get an experienced agent that will look out for your best interest.