Avoiding Common Real Estate Scams: Protecting Your Finances

Transactions within the property market involve a significant financial investment, making this an appealing opportunity for scammers seeking to exploit unsuspecting people. As the market thrives, buyers, sellers and renters must be vigilant and informed to prevent themselves from becoming victims of real estate scams and financial scams.

TK Property Group is a residential investment company with years of experience in the property market. They have provided us with information on the most prevalent scams and tips on protecting your finances while proceeding with your investment opportunity. 

Phishing and Email Scams

Phishing scams are prevalent across various industries, and with vast amounts of money involved, the property market is no different. With this scam, nefarious people will pose as legitimate professionals or companies within the real estate industry, such as fake landlords. They will often request sensitive information or payments that they can then use to sell data or steal money. 

You can avoid becoming a victim of phishing scams with these tips:

• Verify whether the email is legitimate by contacting the impersonated person or company via official channels.
• Don't click on suspicious links or download attachments from unknown sources.
• Be extra cautious of urgent or high-press email tactics. These are strategies often used to manipulate victims by provoking a sense of urgency.

Rental Scams

If you want to rent a property, you must avoid rental scams. These scams are targeted at individuals seeking rental accommodation, including those who are vulnerable or desperate for somewhere to live. Rental fraud may exist as a fraudulent listing, advertising a property the host doesn't own or have a right to let. 

Here's how you can protect yourself from a rental scam:

• Conduct thorough research on the property and the landlord before making any commitments, especially before sanctioning a payment.
• Remain sceptical of listings with prices significantly below the market rate – if it sounds too good to be true, it may well be.
• Always arrange to view the property in person before making a financial commitment.

Wire Fraud

Wire fraud is a financial crime when telecommunications or information technology is used to commit a fraudulent act. A scammer may intercept and reroute a legitimate money transaction when buying or selling a property.  

You can take steps to prevent yourself from falling victim to wire fraud:

• Always use a secure communication channel when dealing with your property agent, solicitor or other relevant party.
• Verify the transfer instructions directly with the intended recipient via a known contact channel.
• Be cautious of last-minute changes to the transfer instructions and confirm any changes through a reliable channel.

Foreclosure Rescue Scams

If someone fails to keep up with their mortgage payments, the property can be taken back from the homeowner. Foreclosure rescue schemes target homeowners by promising to save their property in exchange for excessive upfront fees. During challenging economic times, these scams can become more prevalent.

Here's what you can do:

• Consult a reputable solicitor to prevent a foreclosure, not a person or individual with a little-known background.
• Avoid entering an agreement that asks for upfront payments before the services are carried out.
• Verify the credentials of the individual or company offering the foreclosure assistance.

Title Fraud

Title fraud is when the scammer steals a homeowner's identity to change its legal owner, transferring the ownership to themselves. This scam has seen a 30% increase in fraud protection, with owners seeking to avoid impersonation. 

Follow these steps to safeguard against title fraud:

• Regularly check the property's title and transaction history to identify any unauthorised activity or unexpected changes.
• Consider investing in title insurance to protect against financial losses from title fraud.
• Ensure that all personal information, including property deeds and mortgage documents, is secure.

Summary

While the property market offers lucrative opportunities, it's essential to remain vigilant and informed to protect your finances from potential scams. By staying aware of common tactics employed by scammers and implementing precautionary measures, you can significantly reduce the risk of falling victim to real estate fraud. Always consult with trusted professionals, conduct thorough research, and prioritise secure communication channels to ensure a safe and secure experience.