If you have the financial resources, patience and know-how for it, investing in real estate in California can be a great way to make some extra income. However, with every step you take in this industry, take care that you do not accidentally encounter an avoidable landmine.
Scam Detector explores a variety of different real estate scams. Arm yourself with knowledge so that scammers do not swindle you out of your money.
Unscrupulous real estate agents assigning themselves sales
Some realtors take advantage of buyers in dire financial straits by assigning a client’s sales to themselves. Not only is this a conflict of interest, but these agents may scoop up a property for much less than its true market value.
Hackers swiping down payments
Rather than stealing passwords or financial details, some hackers impersonate real estate agents, approaching buyers and convincing them to send hackers a down payment. The way this works is hackers break into realtors’ email accounts, see which clients are about to close on a house and reach out to them (posing as the agent) to scam them into sending closing payments to a foreign account.
Arc fault breaker scams
When flipping a home, take care that the arc fault breakers in the electrical box are of the current variety that meets the necessary building codes. A construction or renovating company may swipe a new arc fault breaker and replace it with an inferior one, but still charge for the updated breaker.
Double listing
Some scammers take authentic real estate listings and duplicate them on sites like Craigslist, lowering the price to make the fraudulent listing more enticing. Buyers in desperate situations may immediately wire money to take advantage of a seemingly great house for an equally great price. They find out the hard way that they cannot see the house, nor can they get their money back.
Real estate investment has its own set of hazards. Involve a real estate legal professional to help protect your money and your legal rights.