In San Diego, local home values continue to increase or hold steady despite supply and demand constraints. Thus, con artists will do anything to take advantage of innocent homebuyers. Protect yourself from fraudsters by looking out for these common real estate scams when looking up homes for sale in San Diego:
- Wire fraud
- Builder bailout
- False owners
- Double selling
Wire transfer fraud is one of the most prevalent cybercrimes involving real estate. In this kind of real estate scam, potential homebuyers receive a text or an email asking them to wire money, whether as down payment or closing cost to an escrow account. Unfortunately, when money is sent this way, it can be extremely difficult to retrieve. The National Association of Realtors and the Federal Trade Commission have warned homebuyers time and again about email and wire transfer scams.
How to avoid wire fraud: When you receive an email from an unknown account or an unverified user asking you to send money as “payment” for a home you’ve been looking to buy, just mark it as spam. Or better yet, report it. But whatever you do, don’t click on any links on the email. Keep in mind that sending financial information through email is not secure.
When recently constructed properties fail to sell, disreputable builders have been known to resort to shady practices. The builder raises the cost of the purchase price by supplying fictitious down payment assistance and utilizing shell straw purchasers or associates. Because of the increased loan-to-value ratio of the new mortgage, the acquisition price will surpass 100%. This scheme gives the wrong impression that the developer is successful in selling units in the project, but also exposes the lender to loan risk that is higher than the property’s true value.
How to avoid builder bailout: When the deal sounds too good to be true, it probably is. So, dig deeper. Or consult your real estate agent.
In this real estate scam, the con artist locates an empty home and assumes the role of the property’s real estate agent. As either the owner or the agent, they post an advertisement for the property. The con artist takes calls from victims and then strikes a deal. They may occasionally claim to be leaving town while asking you to wire them the money. The money eventually disappears, and you are still without a place to live.
How to avoid false owners: Verify the truthfulness of the post before wiring money. Visit the place yourself to determine whether or not the seller is real or just a scammer waiting for a victim.
Unscrupulous homeowners can also sell their property to two different buyers. They’ll get the money from both buyers and schedule closings within days of each other to keep parties in the dark. Mortgage lenders will then be faced with competing claims on one property, leaving both homebuyers with the prospect of financial loss and miring them in legal proceedings.
How to avoid double selling: Approach FSBO or homes for sale by owners with caution. Better yet, deal with reputable real estate agents or brokers only.
Indeed, having a real estate agent guide you through the complexity of property transactions is one of the best ways to protect yourself against real estate scams. A knowledgeable agent can guide you and present you with viable solutions when you’re looking through the many homes for sale in San Diego.
At Jacobo Realty Group, we’ve been helping our clients buy and sell homes in San Diego, CA for over 20 years. We’ll help you make a worthwhile real estate purchase or quickly sell your home at a good value. Call us today at 760.632.8900 or contact us here to learn more.