How to stay away from real estate fraud

‘Fraud’ is that word you’d rather be without when it comes to major transactions. And if we are talking about powerful, we are talking about real estate. Getting caught up in real estate fraud is one of the worst ways to lose large sums of money, and you end up not getting what you paid for all that money. Here is what you need to do to stay away from such scams.

Identify whose house it is, really

Title fraud, also known as identity theft, is a property owner’s worst nightmare. Scammers falsify documents by changing the property owner’s personal information to match their own. Once the property and all documents are transferred to your name, they take out a new mortgage on this property and seal the deal. Getting your house back after that is pretty tricky. In fact, what happens if they sell their property?

In addition to thoroughly verifying who owns the property, you can opt for ‘title insurance’, which protects your title against fraud. This also protects a new owner against existing claims such as unpaid property taxes, unpaid utilities, and unpaid mortgages.

Do not opt ​​for loans offered in disguise

a) Foreclosure Fraud

Cash-strapped property owners who cannot afford to meet mortgage payments are sometimes cheated. Deceitful people make an offer to repay the loan on behalf of the owner, as if to help them out of the situation, but then walk away without keeping their promises. Deception usually requires immediate payment for the deceiver’s services and an agreement to transfer title to the deceiver. Once this is done, the trickster flees, while you are left behind with accumulated amounts of debt and no property. This type of fraud is called foreclosure fraud.

b) Home Equity Fraud

Beware of those people who are looking at the equity in your home. If you rely on your home equity to borrow money, you need to be constantly on the lookout for unscrupulous lenders so you can stay away from them.

When it comes to leveraging properties, there are huge risks involved. The risks must be carefully explained by your lender. Those who want to earn extra money will embellish their application in such a way that the income, down payment, and property appraisal values ​​are inflated, ultimately helping them land a large loan amount.

Beware of money laundering

Money laundering is another common method of deception. Illegal money is made to look like a clean asset. Beware of people who buy property illegally and sell it to other people. At first glance, the property may seem legitimate to you, but only careful inspection and evaluation can reveal the dirty secrets.

There is only one way to prepare and protect yourself against fraud: constant vigilance! Do your homework and stay cautious and smart with every investment decision you make.