When attempting to rent or purchase a home, a multitude of scam artists can attempt to overcharge on mortgages, steal identities, and cause you much grief in your financial and personal life. It is important to know how to look out for these scams to avoid them.
Different Types of Real Estate Scams
- Moving fraud: Some moving companies have been guilty of quoting a low price only to demand more before actually moving your belongings. Checking the moving company for online reviews and their profile with the Better Business Bureau will be helpful to see if they have any registered complaints. Getting written price estimates from several movers can help you get an idea if they are shorting the initial price.
- Predatory loans: Practices such as selling mortgages for extremely high prices, charging unnecessary fees and surcharges, encouraging borrowers to lie about income levels to secure loans, and charging higher interest to borrowers of other ethnic origins have been cited.
- Foreclosure scams: Scammers that claim that they will negotiate with your lender to avoid foreclosure, complete a “forensic audit” of your lender’s practices, asking you to sell the title of your home so you can rebuy it later, or saying they work for the government have all been reported. Foreclosure assistance companies must disclose they do not work for the government and don’t have the ability to change your loan. They also cannot tell you to stop communicating with your lender.
- Rental scams: Posting rates that are much lower than the competition, asking you to sign a lease before you view the property, charging a property viewing fee, or asking for a wire transfer for a deposit or first month’s rent are warning signs.
Buying or renting a new property can subject you to unfair and illegal practices. Contacting a New Jersey real estate attorney can help you make a smart home purchasing decision that is free of scams.