Real estate fraud is a serious issue that can have devastating financial consequences. To stay protected, learn about the most common types of real estate fraud through this post that Burchard Abstract Company in Gonzales, TX has for you.

Real estate transactions involve significant financial investments, making them attractive targets for fraud. Understanding common real estate scams can help you recognize and avoid potential risks. Here’s a breakdown of the most common types of real estate fraud and tips to protect yourself.

If you want to stay protected during your real estate transactions, call Burchard Abstract Company in Gonzales, TX at (830) 672-8651 to get the title services you need for a smooth and safe process.

Common Types of Real Estate Fraud

1. Wire Fraud

How it Happens:

In this scam, fraudsters hack into email accounts or pose as real estate agents, lawyers, or title companies to trick buyers into wiring their down payment or closing funds to the wrong account.

Warning Signs:

• Sudden changes in wiring instructions.
• Emails or calls urging immediate action or secrecy.

How to Protect Yourself:

• Confirm wiring instructions directly with your agent or title company by phone using a known number.
• Be wary of emails with grammatical errors or suspicious links.
• Use secure communication platforms for sensitive information.

2. Title Fraud

How it Happens:

Fraudsters forge documents to claim ownership of a property, then take out loans against it or sell it to unsuspecting buyers. The rightful owner may not know until they face foreclosure or legal disputes.

Warning Signs:

• Receiving bills or loan statements for unknown transactions.
• Notices of liens or legal claims on your property.

How to Protect Yourself:

• Purchase title insurance to protect against ownership disputes.
• Regularly check public records for unusual activity related to your property.

3. Foreclosure Scams

How it Happens:

Homeowners facing foreclosure are targeted with promises of assistance to save their homes. Scammers may charge high fees for little to no help, or worse, trick victims into signing over their property.

Warning Signs:

• Guarantees to stop foreclosure regardless of circumstances.
• Demands for upfront payments.
• Requests to sign documents without review.

How to Protect Yourself:

• Work directly with your lender for loan modifications or assistance programs.
• Consult a reputable attorney before signing agreements.

4. Rental Scams

How it Happens:

Scammers post fake rental listings using photos of real properties, collecting deposits or fees from victims without delivering a rental agreement or access to the property.

Warning Signs:

• Rent prices significantly lower than the market average.
• Requests for payment before viewing the property.
• Landlords who are “out of town” and unable to meet in person.

How to Protect Yourself:

• Visit the property before making any payments.
• Use reputable platforms or licensed agents for rental searches.
• Verify the identity and credentials of landlords.

Whether you’re buying or selling a property, call Burchard Abstract Company in Gonzales, TX at (830) 672-8651 to get the assistance you need and guarantee the best outcome for your investment.

5. Contract Fraud

How it Happens:

Scammers manipulate contracts by adding or omitting terms to deceive buyers or sellers. For instance, they might add clauses transferring ownership without the buyer’s knowledge.

Warning Signs:

• Pressure to sign documents quickly.
• Contracts with vague or unclear language.

How to Protect Yourself:

• Review all documents carefully and consult a real estate attorney.
• Keep copies of all communications and agreements.

6. Equity Skimming

How it Happens:

Fraudsters target homeowners in financial distress, offering to pay off their mortgage in exchange for ownership of the home. They take out loans against the property, leaving the homeowner with debt and no house.

Warning Signs:

• Offers that sound too good to be true.
• Requests to sign over your property deed.

How to Protect Yourself:

• Avoid deals that involve transferring property ownership without full repayment of debts.
• Seek professional advice from a financial advisor or lawyer.

7. Real Estate Investment Scams

How it Happens:

Scammers promise high returns on real estate investments but use the money for personal gain, leaving investors with no property or profit.

Warning Signs:

• Pressure to invest quickly without due diligence.
• Promises of guaranteed returns with no risk.

How to Protect Yourself:

• Research the investment opportunity thoroughly.
• Verify credentials and track records of those involved.
• Avoid schemes requiring large upfront payments.

Going into the world of real estate can be overwhelming and intimidating if you don’t have experience in it. Call Burchard Abstract Company in Gonzales, TX at (830) 672-8651 to be the helping hand you need at this important time in your life.