What kind of scams have consumers encountered from NOT engaging a licensed Realtor ?

Hello Fellow Realtors,

Many consumers are relying on sources other than licensed Realtors, for their real estate needs. There are many scams out there. What have you all heard? i.e, Craig's List and other posting sites offer rentals requiring deposits, counterfeit Euros as purchase deposit, and bogus vendors. Please elaborate. 
  • September 17 2011 - Miami
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Answers (14)

Profile picture for Wrightkym
I will post a personal experience about Craiglist.  My husband and I were looking for a short term rental, while selling our home in Del Mar.  There were a few homes on the MLS and we went to look at them but my husband wanted something different.  I decided to look on Craigslist finally.  I found a home that was for rent as a short term.  The owner was holding an open house and I met with the owner that weekend.   He mentioned he had just rented the property but we hit it off and exchanged information anyway.  Later I noticed he had reposted the property on Craigslist.  I contacted the ad right away and asked if it had come available again.  I received a bizarre email back that was asking for all kinds of information and a "deposit" to hold the property for me.  Red flags went off and I then pulled the owners information and emailed him directly.  The property was still rented, he informed me.  I directed him to the Craigslist ad and he was horrified. 

We have to be diligent when using sources outside of Real Estate agents.  I personally tell all of my clients that need to rent or buy, to always use a licensed agent, there is nothing else that protects you!
  • September 22 2011
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Profile picture for sunnyview
People also need to use escrow services more for both sales and rentals. I think that more prospective tenants should ask for their full deposits to be held in escrow by a third party.

There are simply too many bankrupt owners that spend that money or run off with it when the house goes into foreclosure. Having deposits in escrow would also mean that scammers never got their money if there was no property to rent.
  • September 19 2011
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There are people buying shortsales via illegal deeds then trying to resell with tainted title or trying to rent the properties that lenders have not had a chance to foreclose on.... Crazy stuff. Please consult an attorney for any transaction you look to do.
  • September 19 2011
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Profile picture for blue screen exile
For buying or selling; it is the ESCROW company and the TITLE search/insurance company that helps minimize fraud, NOT the "agent".

Someone promoting their services and neglecting to mention those that are really protecting the parties to the transaction in my mind is committing a "SCAM" and I will avoid them like they had a contagious disease, especially if they get their terms mixed up and think that membership in an association is synonymous with licensing.
  • September 18 2011
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there is no such thing as a licensed Realtor. Realtor is a member of the association of Realtors...

Your state licenses real estate sales agents, not realtors.
  • September 18 2011
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Profile picture for hpvanc
Jared,

I was not responding to your reply, it makes sense and does not have the self-serving use a licensed Realtor® sales pitch that Rita is pushing, for all purchases and leases.

Rita,

I did not know Realtors® were licensed, real estate agents are licensed with extremely low requirements in most states.  Realtors® are assumably licensed in their state and additionally pay dues to the NAR.  The NAR is an organization that allegedly has a code of ethics, but seems to have no qualms promoting deceptive (i.e. it is a great time to buy prices are down and rates have never been lower so you can't lose every year the market has been tanking) national advertising campaigns, provides their member salespeople with talking points that are far from fully honest to further the organizations causes, and is continuously lobbying to keep real estate agents from becoming professionally accountable.  
  • September 18 2011
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Profile picture for sunnyview
Landlord licensing is different than requiring that everyone rent property through an agent. I would point out that although no system is perfect for preventing fraud, I wish that the current licensing bodies actually enforced the current regulations on their professionals. Taking that step would make it better for everyone.
  • September 18 2011
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Profile picture for SoCal Engr
"Yes, the analogy to lizards is right on. I'm on a bit of a mission to enlighten consumers that it is in their best interest to ONLY work with licensed agents that KNOW the laws and will advise and protect them."

Yes, only work with licensed agents, because there are absolutely no persons with RE licenses or professional status in the RE business listed on this site here.

There's a security mantra in the defense industry: "The most dangerous people are the ones you trust."

Does this mean "don't trust anyone"? No, it means that consumers should always "trust...but verify". And, to be able to "verify", consumers need to be informed, to self-educate.

Who is the most likely person to be scammed? The one looking for a miracle. How many times have people been told, "If it sounds too good to be true...". And yet, time after time, "He/she sounded so convincing...", "I was desparate, and they were the only ones who offered a solution...", "So-and-so told me I could trust these people...", etc.
  • September 18 2011
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@hpvanc. I never said they had to be a real estate agent. I said they needed to be licensed. Many city's have moved to landlord licensing. Just like many other business's that require a license. This helps by educating landlords on what their responsabiltys are and how to operate legally.
  • September 18 2011
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Profile picture for hpvanc
So you are advocating that people not be allowed to rent out their own properties without engaging and paying for a real estate agent.  Sounds like the same argument that agents use about listing FSBO or not using a buyers agent, incredibly self-serving. 

Here is another problem, most agents do not have enough training or a license to review legal documents and dispense legal advise, if you need that expertise you need to hire an attorney.  As to handling the funds for deposit, how many agents are licensed escrow agents, unfortunately there may be enough fraud going on that people will need to go that route on holding deposits, but you need an escrow company to handle it not someone with a salesperson license.

If agents want to start being seen as a provider a professional services they need to start be gaining that additional education and licensing, and then look at how they are being paid for those services, commission is not the normal way to pay for and is often seen as conflicting with the ability to provide professional services.  Do consumers need a salesperson to protect them, or do they need a highly trained and licensed professional?
  • September 18 2011
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Profile picture for Dunes....

"Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery. Mortgage fraud perpetrators include licensed/registered and non-licensed/registered mortgage brokers, lenders, appraisers, underwriters, accountants, real estate agents, settlement attorneys, land developers, investors, builders, bank account representatives, and trust account representatives."

"According to Fannie Mae, short sale, foreclosure rescue, and real estate owned (REO) sales fraud continue to thrive as a result of the opportunities created by defaulting markets. For example, Fannie Mae is investigating fraud schemes perpetrated by real estate agents who manipulate Multiple Listing Services (MLS) data to bolster sagging sales prices. Fannie Mae continues to investigate REO flipping involving real estate agents who withhold competitive offers on REO properties so that they can control the acquisition and subsequent flip."
LATEST FBI FRAUD REPORT

Yep..The Consumer needs to be very aware of Scams and who is committing them....










  • September 18 2011
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I honestly wish that all rental and purchase contracts for housing go through a licensed professional. I know many friends/clients who were taken advantage of when they signed a lease. They paid too much money upfront more than 30 days before the lease started. The tenant signed a lease that had a poorly worded clause that said the tenant was responsible for all repairs to the house even structure/mechanical and drainage. Bottom line there are always going to be people who will try to advantage of somebody. Licenses are a way to track/revoke people who abuse it.
  • September 18 2011
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Thanks Mike & Eve,

Yes, the analogy to lizards is right on. I'm on a bit of a mission to enlighten consumers that it is in their best interest to ONLY work with licensed agents that KNOW the laws and will advise and protect them.

  • September 18 2011
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I had a tenant move out at the end of the lease and not return all the keys. Next thing I know, I received a call from a consumer who drove by the property and wondered why my flyers by the door had a different price than was advertised on Craigs list, (which I did not place an ad in).

Long story short, my former tenant was "renting" out my single family property at a 50% off discount and would give keys to anyone that would come up with a quick $600 deposit. It was a real "deal" and my neighbors said cars were lining up on the street. She (former tenant) had an elaborate story on a death in the family and she had to go out of town, needed the money quick, etc.

I filed a police report and never heard back from anyone...I was told that real estate scams are so common that there is not enough man power to keep it in check.

I hear all kinds of stories from many potential tenants...some of which give first, last and security to get into a property only to find out that the property was sold a week ago, and they have 30 days to get out...they are only "squatters" since the real owner did not rent to them.

Or landlord tells them that utilities are included in the rent, but they are not...

Or landlord does not tell them that the property is in foreclosure...

In Florida, real estate scams are as common as lizzards.

  • September 18 2011
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