How to Avoid Real Estate Scams

It's important to take certain precautions when you're house hunting or looking for a place to rent. In today's tight real estate market in Calgary, it can be easier to fall prey to a scam due to desperation. In order to help you avoid these scams, we have put together some common sense guidelines to follow.

Avoid Sending Money

You'll want to be sure that there's a legitimate person at the other end of the transaction. If you're ever asked to send money through the mail or via wire transfer, turn the other way and run. A legitimate transaction will take place either between the buyer/ renter and the seller/ landlord in person or through an accredited property management company or real estate agent. The best way to make sure your transaction is a safe one is to hand over money in person and receive a receipt for it.

Investigate The Person At The Other End

If somebody is renting out a property on the Internet you'll need to be sure that you are dealing with a legitimate party. An online scammer can claim to be anybody, including a real estate agent or a representative of a certain company. Ask for credentials before turning over any funds, just to be safe.

Physically View The Property

Spammers are running operations for properties that either simply don't exist or are owned by other people. In Ontario, for example, one scammer is renting out a cottage to unsuspecting individuals that are looking for a weeklong vacation rental. When the people arrive at the cottage they find out that somebody lives there and has never put his property online as a rental. These people have not only lost their hard earned money but also arrived at the location only to find out that their holiday plans had been thwarted.

If It Sounds Too Good To Be True...

It usually is. Watch out for low prices that aren't in sync with today's market values. There's always a reason for a lower than average price. It's your job to either find out what the problem is with the property or to ignore the listing altogether to search for others that look a lot more legitimate.

Common Real Estate Scams

There are many different kinds of real estate scams that affect home buyers and renters.

One common form of real estate fraud begins when a fake escrow company sends a communication to a home buyer. The "escrow company" demands a payment for the house the buyer is currently trying to purchase. The email or written communication may look like it's from the buyer's real escrow company, but in reality, it comes from a scam artist. The communication convinces the buyer to wire the money to the fake escrow company. By the time the fraud has been discovered, the scammer is long gone.

Another type of real estate scam occurs when a scam artist pretends to be a property owner. The fake landlord advertises a home that is for rent, using pictures of a property that they don't own. The person in need of a rental home sends a deposit to the landlord. When the time comes to move into the home, the "landlord" is nowhere to be found. Often, it is revealed that the home was never up for rent in the first place, and the person who advertised for the home was not the property owner. 

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.