Caveat Emptor. No, it isn’t some scrumptious Italian dessert! It is Latin for ‘let the buyer beware’, meaning that the buyer must be aware of the purchase. This includes the quality as well as the suitability of the acquired products or services. When it comes to investing in the real estate and financial market, Caveat Emptor is the doctrine that is followed by all. It’s no wonder that scams are prevalent in industries where large sums of money are involved. This is why we frequently hear about scams in the real estate sector. Here we have highlighted four most common real estate scams and how to avoid them.
1. Workshop Scams
This scam has been quite common for the past decades or so. Most con artists set up a workshop promising attendees that they will get rich instantly after attending their workshop. These workshops typically cost some hundred dollars and are nothing more than a sales pitch to purchase an upcoming book about real estate investing.
How to Avoid: In order to avoid such types of scams you need to be level-headed and convince yourself that there is no shortcut to riches.
2. Loan Modification Scams
This one is the most common scam that a large number of people fell prey to during the credit crises of 2008. The scammer targets the vulnerable mortgage payers who are unable to make their monthly mortgage payments. These con artists entice innocent customers by telling them that they will be required to pay less amount of mortgage if they pay an upfront fee for their mortgage modification. These scams also include a fake phone call where a scammer offers an individual to join a mass rejoinder lawsuit for the payment of some upfront fee.
How to Avoid: These upfront fees should be viewed as red flags as in reality, most lawyers take their share after the verdict has been announced by the court.
3. Home Improvement Scams
A homeowner must not just be cautious of the scam related to the sale and purchase of property. There are various fraudulent contractors that lure innocent customers into their shady deals. Most of these so-called ‘contractors’ will offer deals to repave or seal the driveway or to carry out a certain job by using the leftover material from the previous job; only if you pay a certain upfront fee.
How to Avoid: In order to avoid falling in the trap of these contractors, every homeowner should check about the contracting company or individual and ask their previous clients about their experience.
4. Scams Related to Title Documents
This has affected both the investors and the developers but is not very common in the country. Scammers duplicate the title deed and other important documents of a vacant home and sell it to interested buyers posing themselves as homeowners. This scam takes months to be detected and after the fraud is detected the scammer is far and out of reach.
How to Avoid: In order to protect yourself from such frauds, ‘Title Insurance’ should be purchased. A title insurance will also cover the insurance policy holder if there are any encroachment claims made by the neighborhood or if the property title has existing liens against it.
When buying a home for living or investment purposes, choosing the right real estate agency is imperative so that you can avoid being swindled. Elite Realty Agency is one of the most trusted names in the real estate agency business in Florida, and has been providing services to its clients for the past 11 years. Visit our official website to find out more about us or click here to check out our facebook page. You can also call us at 1-407-574-3962 for more information.
PS: When you’re ready to purchase your dream, please give us a ring and let us make it a reality.
PPS: We would be happy to entertain all comments, questions, and experiences here within our comment thread. We promise to get back to you!