Four Red Flags To Watch When Buying Or Selling A House

You may think buying and selling of a house is a simple and easy thing but, the fact is that this is overwhelming and complex process especially if you are a new dealer in the Real Estate Industry.  Currently, the Real Estate industry is changing randomly with rules and regulations varying from time to time.  As a result, you can easily encounter numerous scams that may lead to money loss. Therefore, you need to clearly understand the transaction conducting is genuine and legitimate.  Below, are the four major red flags in the real estate industry that you must review so that you won’t be swindled

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1. The dual agent

Using an agent who represents both the seller and the buyer is not the most effective interest. Normally, the seller expects to sell the property at the highest price possible while the buyer expects to purchase the house at the lowest amount possible. In that condition, it becomes difficult for the agent to treat both parties fairly. The agent may act fairly to the buyer thus disadvantaging the seller or vice verse.  To mitigate the money loss, you should ensure that the agent is tirelessly working for your best interest. Though the dual agency is legal or allows in particular areas, you should try as much as possible to avoid it. Otherwise, you may face the scam.

2. Ensure the commission is paid

The terms of who should pay the commission are always negotiable, and it is very important to spell it out clearly in the real estate contract. In most cases, the seller’s agents should pay the buyer’s agent the agreed percentage of commission. The majority may not understand who should pay for the commission and therefore, it is critical to have the commission highlighted clear in the contract to avoid the commission scam.

3. Get rich quick

Normally, the real estate investment scams are in two key varieties.  The first form of scam is known as the Ponzi scheme where the scammer tricks you to invest into the real estate industry rather than using the amount to purchase the property. The second scam includes the use of the seminars on how to teach people tips on investing in real estate at a charge. Though the seminars are legitimate, they turn to become scams when the primary purpose of the seminar is to sell expensive books to the attendants as well as charging the coaching fee.

4. The “as-is” sale

If you are an entrepreneur looking to purchase a property for reselling, the “as-is” situation is the best option to use but if you want a house to live with your family, try to avoid that situation. You should effectively weigh all the factors before signing the transfer agreement.  The “as-is” means you are buying the house as it is and you can’t hold the seller accountable for any finances incurred in renovating. However, the situation of “as-is” turns to be a scam when you fail to consider all the factors and seller transfer to you a house under poor condition. That means you will have to incur a money loss in repairing the house.

Three Most Experienced Real Estate Scams

The investment scams abound massively at all levels of the real estate market.  The agent may embezzle millions of money while the contractor may exploit the property owner millions of dollars.  Therefore, you should protect yourself through the application of various measures of legwork and vigilance. Consequently, you should exercise common sense as well as the skepticism. Here are three most experienced real estate scams.

1. Online rental scam

You may find a rental property being advertised online through classified sites such as the Kijiji and Craigslist.  The ads may use the photos and information clearly describing the property that has already been “scraped” or withdrawn from the legitimate ads like those on the MLS. Consequently, the scammer may impersonate the agent, property manager, or the landlord and then respond to the calls and emails from prospective tenants. The scammer may propose to meet the renter of the property site so as to exchange the house keys, collect rental deposits, as well as

 

2. Title scam

This is one of the devastating scams for property owners.  It usually begins with identity theft. In most cases, the scammer may present false documents so as to pose as the legal owner of the property. He may use forged documents to transfer the property ownership from the legal owner to the buyer.  Additionally, the scammer may use the forged documents to secure the mortgage against the property. Immediately after receiving the money, the scammer leaves the owner on the hook for paying for the debt.  These forms of scams are highly experienced in homes or houses that are free and clear of the mortgage.  The old homes are likely to be possessed by the old people who are less aware of the effective measures to guard the property against theft.

It is highly advisable for the buyer to first inspect the property before doing the transaction. The “Title insurance” is considered as the best measure of protection against Title scam.  The title insurance also guards the property owner from the existing liens more so, against a property’s title, encroachment issues, and errors in public records and surveys.  Such liens include unpaid taxes, unpaid debts from utilities and mortgages.

3. Home-equity and Foreclosure scam

The scammers may take advantages of the property owners who run short on funds for various liabilities such as the mortgage payments.  The Foreclosure scams occur when the property owner experiences financial difficulties especially in making mortgage payments. The scammer approaches the owner and offers to give a loan cover expenses as well as consolidating any pending loan in exchange for the upfront fee.  Furthermore, the scammer may convince the owner to sign an agreement to transfer legal property title.  Immediately after the transfer is completed, the scammer may ignore all bills and taxes of the owner and remortgage and absconds the property leaving the owner without a house but still in debt.

signing a tenancy agreement. The victims will realize that were conned when they show up at the property site just to discover that the apartment is already occupied.

Real Estate Frauds to Be Careful 

real_estate_plan_under_construction_356x200_4828_356The matters of selling a real estate property are rife with dangers because there are a lot of smart fraudsters who make use of the help of lawyers in order to sell a property that it not theirs to begin with. A legal counselor ought to be careful about a customer who looks for the utilization of the legal counselor’s trust account without requiring any significant legitimate administrations from the legal counselor regarding the trust matters, or guarantees impossible profits for their speculation to outsiders who have put cash in trust with the legal counselor or have been welcome to do as such.Utilization of false personality is a common case in real estate fraud.

Some Real Estate Frauds to Be Careful Of

download-2In this situation, the fraudster imitates the genuine proprietor of the property. The fraudster picks the property, does a title hunt to affirm the subtle elements of the proprietor and after that makes up false personality papers that match the character of the genuine proprietor. On the off chance that the property is as of now sold, the fraudster may fashion a release to clear the title. At that point, he or she applies to another money related organization for home loan financing equivalent to a large portion of the property estimation.

house_sell_real_estate_home_loan_356_x_200_0504_356The fraudster is relying on the money related foundation doing just a fundamental historical verification since the home loan is just half of the property estimation. On receipt of the new home loan supports, the fraudster may keep up the installments for a period of time before vanishing with the assets. The genuine proprietor is then left with the cerebral pain of attempting to release the deceitful home loan. The legal counselor who arranged and enlisted the home loan later discovers that he or she was an accomplice of a fraudster.

Common Fraud Cases in Real Estate

images-1The real estate industry is one that requires careful consideration. There are plenty of fraudsters that wish to cash in on property that is not theirs. In some common cases, the fraudster presents to an attorney a bogus assertion of procurement and deal to get title to a property. The fraudster then home loans the property. Once more, after a period, both the fraudster and the money of the home loan stores vanish. The genuine proprietor of the property finds that the property is in dispossession and that he or she no longer holds thetitle.

Being Careful of Common Fraud Cases in Real Estate

working-with-real-estate-agents-1The legal advisor later finds that he or she unwittingly helped a fraudster in acquiring title to the property.A comparable situation includes the fraudster focusing on property possessed by an organization. False accounting books are readied and the fraudster may mimic one of the corporate principals. The fraudster applies to a money related organization for financing and displays the false corporate reports in backup the home loan application. Not long after in the wake of accepting the assets, the fraudster vanishes.

download-1Another probability is for the fraudster to mimic both the buyer of property and a true blue legal counselor. The fraudster goes into a genuine deal contract with an honest to goodness merchant. Utilizing the false legal advisor certifications, the fraudster opens a trust record and taunts up letterhead as though representing the buyer. The fraudster who is moonlighting as an attorney draws up the archives and applies for home loan financing. At the point when the home loan assets are theirs, they are saved to a false account. At that point, the fraudster and the home loan vanish. In this circumstance, consecutive buys of the same property are orchestrated from an authentic merchant. The primary buy is at the organized deal cost.