Housing cons are at an all-time high in New York. Scammers and con artists constantly evolve and find new ways to swindle New Yorkers off their hard-earned money. The city of New York regularly holds the top spot as the most expensive city in the country and sometimes the world.
The typical price of a home in New York’s five boroughs is around $722787, compared to a nationwide median of $303288. Home prices in Manhattan easily reach $1 million.
This real estate boom has made New York residents prime targets for house buying scams. Scammers are having a field day in the real estate sector. In 2020, 13,600 people reported cases of real estate fraud.
Scams come in a variety of shapes and sizes. If you’re active in the real estate industry in New York, this article will provide tips and advice for new home sellers and seasoned veterans. These tips will help you understand the process, so you don’t waste money on con artists and scammers.
Spotting a House Buying Scam in New York
The covid19 pandemic has led to a shift in how we do things-everything is virtual now. The virtual ecosystem has made it even easier for scammers. The internet and listing sites are full of we buy houses and cash offer adverts. There is nothing wrong with this in general, but some of these advertisers are scammers.
The following are telltale signs of a scam-
- Unwarranted demands to wire money – If someone demands you send them money directly, be very careful. It is likely they will disappear as soon as you send that money. Scammers claim that the money is the deposit for the house and will act as goodwill.
- A lot of Pressure – Con artists will pressure you to send your personal information and money as soon as possible. They will make you believe that you’re getting an outstanding deal, and any hesitation will culminate in you losing out.
- Unrealistic guarantees – If a seller or lender makes you an offer that does not reflect the actual value of your house, run. In mortgage relief scams, this is a popular approach.
Scammers will frequently offer to make adjustments to your loan in exchange for an upfront payment. It is improbable that anyone would be willing to shortchange themselves knowingly.
- Lack of Documents – If you’re interested in buying a house and the seller is unwilling or unable to show you the necessary paperwork, it is very likely they are hiding something.
How to Avoid Being Scammed
Scams are a thorn in the real estate market in New York. Fortunately, you can protect yourself by understanding how off-market real estate deals work.
Know Who you’re Negotiating With
Scammers often have numerous signposts spread across the neighborhood and the internet.
Their signs do not contain any relevant information apart from the statement that they buy houses. Make sure whoever you are dealing with gives you verifiable information on who they are.
A legitimate business or individual makes public information like their website, phone number, and address. This information allows you or any interested party to conduct further investigation.
A prospective seller will likely give you some information that you can check. To appear legitimate, scammers try to appear as if they work for an organization you might know.
Please do your research independently and avoid any links that a seller or buyer might give you as a way of ascertaining who they are. Additionally, ensure all communication is in writing. Most verbal contracts cannot be proven, thus not binding. Having a written copy of the information will also allow you to revisit the details later.
Research the House Buying Process.
In a conventional house buying process, your real estate agent kick starts the process by making an offer. If the seller likes the offer, he accepts it. You then make a deposit which goes towards the deposit and closing costs.
Selling a house is dependent on both parties sharing information. Knowing what and when to exchange information is critical.
Keep Your Information Safe.
For a scam to be successful, the con artist needs you to divulge your personal information. Scammers have developed various ways to try and make you give up vital information. They send emails and make phone calls using emails and phone numbers similar to your official bank and credit card contact numbers and emails.
All this is an effort to get your social security number, account numbers, and passwords. If you get a call from an unknown number that is very similar but not the exact number your finance providers use, it would be wise to hang up and do some research.
No matter what they say, do not indulge them. Your bank and credit card providers have all your details. If they need anything, they can check their directories.
Types of House Buying Scams to Look Out For
House buying scams are constantly changing and being developed. It is impossible to know and understand all the cons. Here are some common ones:
Cash offer on House scam.
Cash offers on houses are very convenient. Unlike average sales, which last for more than a month, a cash offer sale can last only a few days. The benefits of accepting cash offers are numerous.
If you are looking to sell your house as-is, a cash buyer provides the perfect opportunity. You do not have to make repairs, and the sale happens on your timeline.
By understanding how the off-market buying process looks like, you can avoid these scams. To prevent a fraudulent cash offer on your house, do the following.
- Do due diligence. To avoid the hassle of due diligence, we buy homes in Long Island.
- Force a personal connection with the buyers.
- Hand over the deed only after the total amount agreed is in your bank account.
- Observe any rash behavior.
Money in the transaction should always travel in the seller’s direction. There is no instance where a seller gives money to the buyer. So, if a house buyer ever asks you for money, whether it’s an administration fee or a processing fee, that’s a huge red flag. You should not only refuse the offer, but you should also notify the authorities.
Not every cash buyer is out to get you. There are legitimate companies that buy houses in New York.
We Pay Cash for House Scams.
Finding someone to pay cash for your house is fantastic, especially if you need to sell your home fast. The reason many people fall for this scam is that it is very convenient if you’re in need.
Cash buyer scammers promise to deal with situations like severe mold damage, water damage, and unruly tenants after the purchase.
Getting such an offer will leave you dreaming of walking into the sunset with no extra costs. Sell my house fast Queens offers you the convenience without worrying about scams. Before entertaining anyone offering to pay for your house in cash, do the following;
1. Make sure their company exists – A simple google search will yield some results. You can also inquire on subjects like the location of their offices or who the company’s owner is. If you don’t find anything on the internet, and the company keeps dodging questions, that is a red flag.
Legitimate companies are willing to divulge information that will make their clients feel safe.
2. Ask for a sign of good faith – A legitimate investor will ensure an agreement between you two since they will eventually buy your house.
Wire Transfer Scam
This is how it happens: You get a call, an email, or a text message from someone claiming to be from an escrow business and offering to wire your escrow payments. The fraudsters set up a website very similar to the website of the escrow company you are working with to appear reputable.
These scammers use digital techniques to make their phone numbers and websites appear familiar. In most cases, these emails and numbers have one different character. It is tough to notice such a minor detail. Once you send money to their accounts, it is almost impossible to retrieve it.
To avoid falling for wire fraud, always check the original documents given to you by your lender before wiring any money. Call the phone numbers listed on those original documents to confirm the wire instructions.
Always double-check the escrow account number before transferring money, and call your settlement agent to confirm the fund’s transfer as soon as you’re finished.
What to do if you’re Scammed When Selling Your House.
If you suspect that a company or an individual has scammed you, report it immediately to your local police department and the FBI. You should also contact your bank.
Additionally, file a complaint on any form of scams with the Federal Trade Commission (FTC). The sooner you notify the bank and law enforcement, the better your prospects of retrieving your funds.
Fraud is constantly evolving in the real estate industry in New York. We hope that this guide has informed you of the typical housing scams and how to avoid them. If you are involved in a house sale, always trust your gut- do not be afraid to walk away regardless of the potential reward.
Conduct your due diligence every time you receive an offer. At no point should you hand over any essential financial and personal information. If you come across a suspicious listing or do get scammed, please inform the authorities.
Contact us to find out more on how to avoid house buying scams in New York.