New Resource: Federal Trade Commission Offers Helpful Tips to Consumers to Avoid Rental Scams
Being savvy when you’re in search of a rental is well worth the effort. Click here for tips from the FTC.
MIBOR Sees Spike in Calls Related to Real Estate Scams
In recent months, MIBOR has received an increasing number of calls from members who receive leads from websites from buyers who are attempting to purchase properties sight unseen. It is extremely important that you exercise due diligence with these leads as it is strongly suspected that they might be scams. The simple fact that they want to purchase sight unseen is not in and of itself the determining factor. You should look at the entire scenario. The typical story is as follows:
- Buyer contacts REALTOR® via email through a lead generated by a housing website of some kind.
- Buyer wants to purchase the property sight unseen.
- Buyer says they would like to purchase a specific listing, usually in the price range of $300-800,000. Buyer wants you to recommend a good attorney for them to use.
- Buyer wants to send a very large earnest money deposit/down payment to you or the attorney you recommend. (It is suspected that they might want to have this money deposited in the attorney’s escrow account, or have the REALTOR® deposit it in their company’s escrow account.)
These buyers are “fishing”, sending many emails to REALTORS® with stories such as intending to retire in Indiana. It is suspected that the intent of these scammers is for you or the attorney to deposit a check into an escrow account, possibly walk away from the transaction, and have the money refunded to them. If the check wasn’t good to start with, then it is possible that the attorney or company writing the check might be out the funds. In addition, it is suspected that the scammer may be trying to access the attorney’s escrow account.
Be aware that these scams have been occurring on and off for the past several years. Please continue to report them to MIBOR so that we can track them for patterns and post information on the Welcome Screen. Knowing that there are legitimate buyers from outside of the country, we will post names only if we receive multiple reports on the same individual.
MIBOR contact information: Jeanette Langford (317-956-5241) or Jamie Jansen (317-956-5244).
Update (11/7/14): WRTV-6 recently reached out to us to participate in a story on this topic. See the report here.
Watch our video on rental fraud:
- Scammers lift property details such as the description and address and even photographs from websites where listings are actually advertised for sale to create fraudulent "for rent" ads.
- The "for rent" ads are then placed on any number of sites including Craigslist, Zillow, Postlets and Hotpads.com.
- Scammers, pretending to be owners of the property, request that you complete an application containing confidential information and/or send a deposit.
- When interested parties comply, by sending a completed application or wire a deposit without first seeing the property or meeting with the owner, they become victims often times not knowing it until move-in day.
- Victims are often left without a hefty deposit and somewhere to live. More troubling, by completing an application with confidential information, they're prone to further identify theft.
What Should You Do?
- When searching for a rental property online, it's important for renters to contact the agent whose sign is on the property to find out if it truly is for rent.
- Use www.MIBOR.com or MIBOR Mobile - it is a trusted source for listing information.
- Renters should also research the average rental rates for apartments and rental homes in their area.
- If a price seems too good to be true, it probably is.
- Renters should be suspicious if they are asked to only use a wire service to submit a deposit.
- Renters should not give out personal information like their social security number, bank account or credit card numbers.
- If you or someone you know has been the victim of a scam, please report it to the police and FBI.
Tips From REALTOR.com
REALTOR.com provides a great resource on this topic for both REALTORS® and consumers. Check out their tips to protect yourself, http://www.realtor.com/rentals/onlinefraudalert
Work with a local REALTOR®
Working with a local REALTOR® is one of the best ways to avoid becoming the victim of a rental scam. They have access to the most up-to-date listings and are committed to upholding the Code of Ethics of the National Association of REALTORS®. Let a local REALTOR® help you avoid a rental scam and guide you to the perfect housing option.
REALTORS®: Here is a video from NAR about protecting your listings: http://bcove.me/6l6rn6tt