Oct 3, 2011

Avoid this scam when your home is for sale

While there may be fewer Realtors earning a living today, there is one group still making good money in real estate - scammers and crooks. I have exposed a few crooks and have featured a few of their scams on this blog.

Currently the increase in leasing activity has caused an increase in the type and number of leasing scams perpetrated against potential tenants and owners. The most common scam is a type of advanced fee fraud. This is similar to emails we've all received for years where a Nigerian prince needs our help moving $20 million out of the country and all we need to do is give him our banking information. 

How does that work with Real Estate?
In real estate, the lease scam works like this:
  • Legitimate Realtor/Owner list property for sale and put it into MLS.
  • Scammer uses exact listing details, real owners name, and often the listing agents name and offers the property for lease online using sites like craigslist, zillow, etc. 
  • Scammer offers the property for lease significantly lower in price than comparable properties in the area. 
  • Potential Tenant sees opportunity to get a "steal" of a deal on a property and emails Scammer. Scammer usually uses an email address with real owners name in it.
  • Scammer claims to be an absentee owner or currently out of the country.
  • Scammer asks for deposit to be wired to London, Madrid, California, etc to secure the property at that price.
  • Potential Tenant suspends common sense and wires money to Scammer.
How can the scammer list properties for lease without permission?
Many websites allow anyone to list items for sale without first proving ownership. If you've ever bought or sold something on Ebay or Craigslist then you know how simple it is. Some websites do not allow the public to post properties for sale or lease. Realtor.com and ReloHomeSearch.com are two examples.  Some websites do allow the public to post properties for sale or lease. Trulia and Zillow are two examples as well as many 'by owner' sites.

As a seller, how can I protect myself?

Often, we don't find out about a fraudulent listing until a potential victim knocks on the door or calls the office. One tool you can use to look for fraudulent listings online is Google Alerts. Google Alerts allows you to set up an automatic Google search that will search for certain terms and alert you by email when new web pages are indexed by Google that contains those terms. For listing fraud, I recommend you set up an alert with your street address ( for example, if your address is 1234 Main St, Dallas, Tx) and the term rental or lease like:
"1234 Main" dallas rental or "1234 main" dallas lease

If someone posts your property for lease and you've registered it with Google alert, you should find out quickly. You'll be able to find out the exact website or web page where the listing appears and contact that company's fraud department.

How can tenants protect themselves?
  • Deal locally with a reputable Realtor that you can meet in person at a traditional office.
  • Verify the that the Broker or Realtor are licensed to operate in the state of Texas. (Tx Real Estate licensee search)
  • Don't advance money on a property you've never toured.
  • Don't wire money via Western Union or Moneygram to secure a lease.
  • If it sounds too good to be true, then it's probably a scam. Proceed with caution.
What are sites or law enforcement doing to protect us?

Some sites are very proactive in blocking this type of abuse. Some have implemented extra security checks or started charging a fee to list property. My broker and I have aggressively dealt with fraudulent listings that appear online. We can usually get the listings removed within hours or minutes. 
More resources
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