First time home buyers are often like innocent lambs being circled by wolves. Being a first time home buyer means there’s a lot of information that you do not know, which also means it is easy to lie to you or bend the truth somewhat.
As a first home buyer, you must proceed with caution and learn about the common scams in this sector to avoid falling for them. Buying a home involves the exchange of a ton of cash which is what attracts all sorts of scammers. Before you proceed with your search for a new home, make sure you understand various scams and how to avoid them.
Scammers mostly target new home buyers by stealing your personal information, which is then used to put you in a financial pickle. For this reason, take your time searching for a trustworthy real estate agent. Up next we’re going to tell you about common scams you should watch out for.
Lousy Loan
The Lousy Loan scam is when you receive a call from a real estate financing agency that will claim to reduce your monthly payments in exchange for a fee and full access to your bank account.
To avoid this scam never respond to any unsolicited offers claiming to modify your loan. When you need to change your monthly installments, talk directly with your lender or another reputable agency. Don’t proceed with any deals on the phones.
Cover Up
Some real estate agencies are only after your money; therefore they go to great lengths to cover up any significant problems in a potential house.
They take time disguising toxic mold in the bedrooms or holes under the sink. The sellers do a cosmetic fix but don’t disclose it in their property statement. These repairs can cost you a lot of money and also reduce the value of the house.
Before making the final purchase transaction, consider hiring a trusted inspector to do a thorough inspection of the home and notify you of any damages. Ask for repair details and contact the repair company to have more information on the home you are about to purchase.
Wire Fraud
Wire fraud is a common fraud in the modern market. The scammers wait until you go into a purchase contract. Then they will ask you to send money to a company at least once or twice. They might ask you to send money to the escrow agent, mortgage advisor, real estate agent, or escrow assistant.
These scammers hack the real estate agents’ computers, and check for pending transactions. After seeing your file, they will know the exact amount to ask for and your contact details. Once you send the money, they will withdraw it automatically and disappear, unable to be contacted again.
Protect yourself from wire fraud by inquiring from your agents about the steps they take to keep your information private. Moreover, please don’t send any money until you confirm the authenticity of the email or phone by checking with your agent and bank.
Unlicensed Individuals
Many reported frauds involve unregistered individuals taking advantage of their clients. Every real estate broker or agent must have a license of operation, allowing them to sell, purchase, or manage real estate. You can lose a lot of money by sending it to someone who isn’t registered and then disappears.
Protect yourself from fraud by contacting the organization involved with real estate agent registration. Confirm the authenticity of the agent’s information. Choose a trusted and highly recommendable real agent company that has been in operation for a long time and has licensed agents.
Foreclosure Fiasco
In cases when homeowners are faced with any financial strains, they might list their home for sale, but they might not have the right to as in the case of foreclosure. In such cases, be thorough in your research and ensure that you have full information on the property.
If the cost of a home seems much too low for it to be the real selling price, that can be a good clue.
The Bottom Line
When you are a first home buyer, do extensive research on the real estate company, agent, and brokers. Ask for proof of license and don’t wire any money unless the request comes directly from someone you know. Moreover, ask how your information is protected to ensure it doesn’t fall into the wrong hands.