4 Common Homebuying Scams and How To Avoid Them - Home & Texture
Before You Buy Homebuying Scams

4 Common Homebuying Scams You Should Know About (Plus How To Avoid Them)

Stay vigilant on your path to homeownership.

By
May 6, 2024 at 8:15 PM PST
Updated on May 6, 2024 at 8:15 PM PST
Before You Buy Homebuying Scams

4 Common Homebuying Scams You Should Know About (Plus How To Avoid Them)

Stay vigilant on your path to homeownership.

By
May 6, 2024 at 8:15 PM PST
Updated on May 6, 2024 at 8:15 PM PST

Homeownership is almost always a marathon, rather than a sprint. You’re immersed in this world of new terminology, paperwork and decisions—it’s an exciting time, but it can also be a confusing one. Without doing research or having the experience of buying a home, it creates the perfect setting to fall victim to a scam. Here are a few common ones you could face, and how to avoid them.

1. The Phantom Listing

You’re scrolling through listings, heart skipping beats at the sight of your dream home at an unbelievably low price. You reach out eagerly, only to discover it was all a mirage. The phantom listing phenomenon is a harsh reality in the world of real estate. How do they do it? Scammers hijack legitimate listings, altering details to entice hopeful buyers into their trap.

How To Avoid a Fake Listing

  • Conduct thorough research on the seller and the property.
  • Use trusted real estate websites and platforms for listings.
  • Always insist on viewing the property in person before making any commitments.
  • Trust your instincts and be cautious of any red flags, such as unusually low prices or pressure to act quickly.
  • Consider enlisting the help of a reputable real estate agent to guide you through the process for legitimacy.
Photo credit: alvaro gonzalez

2. The Deposit Dilemma

You likely already know that to purchase a home, you’ll need a pretty sizeable deposit. Don’t make the mistake of eagerly handing over a sizable deposit in a rush of excitement without doing your due diligence to take proper precautions. Not all sellers have honest intentions. Some vanish into thin air, leaving buyers empty-handed and disheartened.

How To Avoid Losing Your Deposit to a Scammer

  • Research the seller’s background and reputation thoroughly.
  • Request and review all necessary documentation related to the property and the transaction.
  • Consider using escrow services to securely hold funds until the transaction is completed.
  • Avoid making large deposits upfront without proper contractual agreements in place.

3. Title Trouble

How To Avoid a Shady Title

Titles hold all the secrets. Always conduct comprehensive title searches, enlist the expertise of professionals, and ensure all legalities are in order before closing the deal.

  • Research the property’s title history thoroughly, including any past transactions or legal issues.
  • Hire a reputable title company or real estate attorney to conduct a detailed title search.
  • Review all title documents carefully and verify the authenticity of signatures.
  • Look for any outstanding liens, unpaid taxes, or encumbrances that may affect the property’s ownership.
  • Get title insurance to protect yourself against any unforeseen title defects or claims.
  • Communicate openly with the seller and address any concerns or discrepancies regarding the property’s title before finalizing the transaction.
Photo credit: Grace Cary

4. The Sneaky Bait-and-Switch Scheme

You’re enchanted by a property showcased in glossy brochures or online ads, only to find reality falls short of expectations. This is the bait-and-switch scheme in action. Unscrupulous sellers present properties in their best light while concealing flaws, leading buyers into a trap of false promises.

How To Avoid the Bait-and-Switch Home Scam

  • Schedule in-person inspections of the property to assess its true condition.
  • Hire a professional home inspector to thoroughly evaluate the property’s structure, systems, and potential issues.
  • Take your time to carefully review all aspects of the property, including hidden areas and potential red flags.
  • Request documentation and records related to the property’s history, maintenance, and any recent renovations.
  • Be skeptical of overly polished marketing materials and always verify information provided by sellers.
  • Don’t hesitate to walk away from a deal if something feels off or not as advertised.




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