7 Tips for Avoiding Fraudulent Real Estate Transactions

7 Tips for Avoiding Fraudulent Real Estate Transactions

  • Brenda Freeman
  • 05/18/22

While fraud can include unintentional harm, malicious and intentional scams make up a large part of the real estate fraud that occurs in the U.S. Because of the high value of Grand Lake, Granby, and Winter Park, CO homes for sale, the real estate market can attract all kinds of scammers.
Buying or selling real estate can be stressful sometimes, things move quickly, and you have a lot of responsibilities to juggle. Taking just a minute or two to verify uncertain information can save you from irreparable damage and the loss of thousands of dollars. If you’re diligent, you can protect yourself from real estate fraud. Here are some of the most common scams:

Wire transfer scams

When you’re purchasing Grand Lake, Granby, and Winter Park, CO houses for sale, you may need to conduct a wire transfer. These usually occur via email, which can be insecure and intercepted. The scammer will pose as a trusted party and relay different information than the intended recipient. If their scam is successful, your funds will be sent directly to the fraudulent account.

Protect yourself from wire transfer scams by insisting that all parties use secured file transfer services. If you receive an email asking for funds, double-check the email address and call the person who allegedly sent the email to confirm their instructions. Be diligent. Scammers are very good at impersonating people we trust and often include personalized information to make emails appear legitimate.

Title fraud

Title fraud occurs when a person who is not the legal owner of the property tries to sell it. Use a reputable title company when purchasing a Grand Lake, Granby, and Winter Park, CO home for sale to protect yourself from title fraud. The title insurance you pay will cover any legal battles should issues arise.

Often, title issues are unintended someone, somewhere in the past, didn’t complete the proper paperwork or didn’t file it with the correct agency. Even though it was unintentional, the legal red tape to fix such issues can be costly. Be sure you’re using a local title company that can provide references, and you should be in good hands.

Predatory lenders

Predatory lending can take on many forms. It might be underhanded, like slipping in high fees at the end of the transaction or something as bold as threatening you to sign documents that aren’t in your interest. Predatory lenders use deceptive practices to convince you that you need this loan or that you must go through them because no one else will approve you. If you feel rushed, pushed, or confused at any stage of the process, get out. Find someone else to help finance your chosen Granby, CO house.
The housing crash of 2008 resulted in new regulations that keep banks in check. They must disclose all fees at the beginning of the relationship and must provide you with an “out” should you change your mind before receiving funds. Verify your lender works for a reputable bank, and ask for references if in doubt.

Seller’s protection

Unless you’re a licensed real estate agent or a real estate attorney, you shouldn’t attempt to sell real estate on your own. The appeal of keeping the agent’s commission may be strong, but you could unwittingly land yourself in legal trouble simply because you didn’t know certain details mandatory for real estate transactions.
There are for-sale-by-owner services available whose entire business model is to help owners put up their Grand Lake, CO homes for sale. Assuming they’re perfectly legitimate and knowledgeable, they are still removed from you and your situation. They have no skin in the game other than earning their fee. When you work with a local agent, they have a business reputation to uphold. They have much higher stakes and will care and work for you accordingly.

Buyer’s protection

Getting an appraisal and home inspection will protect you from fraudulent claims of the home’s value. If the seller omits important information impacting the value of the home, that is fraud. The key here is to make sure you’re using reputable appraisers and inspectors. Talk with your home inspector to make sure you understand how they appraised and inspected your home. You want a thorough, detailed inspection when purchasing Granby, CO houses for sale.
Real estate transactions involve a lot of personal and sensitive data. Make sure everyone you work with takes reasonable measures to protect against identity theft. If you can, avoid giving out sensitive information via email and communicate personal information through secure channels.

Researching your agents

Do a thorough search on all the agents you plan to work with your real estate agent, their broker, your lender, the title company, all of them. If any person or entity involved in your Granby, CO real estate transaction is a fraud or scammer, your transaction can become null or worse, fraudulent.

You can verify a real estate license through their state website. You can also verify your lender’s NMLS number. Meet your agents in their office at least once to verify their legitimacy. While an in-person meeting may be difficult to accomplish during the pandemic, you can still drive by their office and arrange a quick meeting outside.

Find a good agent

When it comes to real estate, your agent is your key advisor. They can refer you to reputable title companies, lenders, home inspectors, and more. Work with a local agent who has experience with the type of real estate you need. For example, if you’re a first-time homebuyer, make sure your agent can provide you with examples of recent first-time homebuyer success stories. Ask if they have referrals for Grand Lake, Winter Park, and Granby, CO houses for sale.
If you’re looking to sell luxury real estate, make sure your agent has experience with buying and selling luxury Granby homes. A quick internet search can help you verify their previous transactions, as will word-of-mouth a good agent will have a strong reputation in the community. When you meet, do a gut check; you should feel comfortable around them and be able to ask questions. You should never feel pressured.
Brenda Freeman of Grand Lake Real Estate is a local expert with over two decades’ worth of connections in the local community. Contact Grand Lake Real Estate today to begin your search and resolve any questions you might have.

Work With Brenda

Brenda’s clients appreciate her high attention to detail, strong market analysis, and proven price and appraisal training. Her professionalism and dedication are yet another benefit.