Protecting Yourself From Real Estate Scams
As a Lewiston-Auburn Maine Realtor®, I have received my fair share of real estate scam emails. Almost all Realtors® with a strong internet presence get these on a regular basis.
Since For Sale By Owner sellers are now utilizing more and more internet sites to advertise their homes, they may start to receive these as well. Real Estate agents are so familiar with these schemes, that they can spot them quickly and protect their sellers. While these emails often contain obvious red flags causing most people to be suspicious, they must be working on someone or the scammers would not continue to spend time sending them out. For a frustrated seller, even though their inner voice tells them it may be a scam, the temptation of a quick and easy sale can be too much to ignore.
If you are trying to sell your home by yourself, please review the latest real estate scam below so that you will be able to spot a fraudulent buyer if one comes along.
Real Estate Scam:
A scammer, posing as a buyer, sends an email, usually stating that they are moving to your location from a foreign country. They request the name and contact information of a local attorney to help them with the money transfer and offer to pay full price and close in a very short time frame, buying the home “site unseen.” They may even ask to include viewing of the home just before closing as a contingency of the sale.
The scammer does not offer the customary earnest money deposit, but rather either offers to send a very large deposit or the entire amount close to to the closing date. Just after the funds are received by the victim, and before they have a chance to clear the bank (or in this case before anyone realizes the funds are not really there) the scammer requests a refund of all or a large part of the money. They come up with various convincing sob stories for this designed to pull at your heart strings.
The scammer is hoping that the seller or the attorney’s office wires the money to them. Unfortunately, since the original funds have not cleared the bank, the money sent to the scammers will come out of the seller’s or the attorney’s pocket.
Even if you never get to the point of actually sending money back to the scammer, accepting a shady offer like this will take your home off of the market and waste your valuable time and resources.
Originally, these scams were sent from people posing as Nigerian Princesses, wealthy investors from Jamaica, or widows from other small countries. The scammers seem to have exhausted those stories and have now moved on to posing as attorneys and teachers from European countries. They even use names and contact information of real people...with a different email address of course. That way, if a savvy seller does a little research online, they will look like a legitimate buyer at first glance.
Here are some typical red flags to look for:
- Foreign Buyer
- Needs to close quickly
- Does not want to see the home in person, or only wants to view it just before closing
- Cash Deal
- Excessively large deposit to be sent very close to the closing date
- Typos or incorrect grammar in the email
- Requests that you contact an attorney for them or send contact information
- Requests your personal information
Basically, if a deal sounds too good to be true, it is. The above red flag items by themselves do not guarantee a scam, but when you see more than one of these in an email, chances are it is a scam. The purchase of a home is a huge investment. Real buyers will want to view the home before making an offer. Serious buyers from overseas will actually schedule a time to come and look at homes before they buy. Not all foreign buyers are scammers. I myself have received a contact through facebook from a couple coming from South Africa. I was suspicious at first, but they did actually come and view homes with me. They were not in an excessive hurry, and went through the traditional steps for their home purchase.
How To Protect Yourself:
- Ask questions.
- Don’t give out any personal or bank information.
- Insist on an earnest money deposit to be deposited and held for a sufficient amount of time to ensure the funds are real.
- Consult with an attorney.
Most of all, if you have questions, consult a professional. Even if you are selling your home by yourself, I am here to help when I can. While I cannot provide you with client level services, per the rules of the Maine Real Estate Commission, I am happy to answer your questions.