Renters Should Beware of This Online Scam
Thomas Woods and Catherine Krack, residents of Arlington, Ohio, were in the market for a new home and began their search on Craigslist. Not long after, they found a property near Upper Arlington that was too good to pass up.
The Craigslist Con Unfolds
The Craigslist ad said the 1,200-sq.-ft. home cost $850 a month. Skeptical about the appealing offer, they did their due diligence and reached out to the owner using the contact information listed on the Craigslist ad.
“He was giving us a story about how he and his wife moved, and they want somebody that will come in and take care of their home,” Catherine Krack said. “Everything seemed legit with the exception of we never met [them] in person.”
For most, not meeting a property owner in person sounds like an easy red flag to spot. However, with the lingering effects of the pandemic, the couple assumed their lack of face-to-face interaction was due to fear of spreading the COVID-19 virus. This is also why they agreed to send their deposit electronically.
In total, Woods and Krack spent $2,100, paying the “property owner” through Bitcoin and Apple gift cards.
“The last bit of money that we had all went to a U-Haul and storage. So, we literally had zero dollars to our name,” Krack said.
Following the electronic deposit, the couple actually moved into the home and lived there for a week. It wasn’t until the actual owners of the property, a local real estate company, contacted them about the home, which resulted in them having to move out and stay with friends and family.
One word of advice from the couple after learning their lesson the hard way? Meet your contact in person.
“Meet with the person, [and] don’t give them anything until you meet with them. Meet with them and make sure that they have a lease in hand and things like that before any money exchanges,” Krack said.
Scams such as this are all too real and happen more often than many would like to admit.
“Unfortunately, there are just too many scammers that can put the consumer into a bad position,” said Matthew Long, a REALTOR® with HER REALTORS®.
Scammers often copy and repost legitimate ads online, pricing the properties low enough to catch those looking for a bargain, then ask prospective renters to wire a deposit. “A lot of these scams, they’re asking for money very quickly, and that, to me, is definitely something a consumer should be watching out for,” said Long.
Most Common Real Estate Scams
As real estate professionals, you are responsible for protecting your clients’ interests and should be aware of common real estate scams and schemes. Here are the five most common real estate scams to keep an eye out for:
1. Escrow wire fraud: Scammers claiming to work with your client’s title or escrow company will reach out to them with instructions on where to wire their escrow funds. Fraudsters will go to great lengths to enact this ruse, even setting up fake websites that appear similar to the title or lending company your client is working with, making their request seem like the real deal.
2. Loan flipping: Loan flipping occurs when a predatory lender persuades a homeowner to refinance their mortgage repeatedly, often borrowing more money each time.
3. Foreclosure relief: Homeowners who fall on hard times and get behind on their mortgage payments can become desperate to save their homes. Scammers will swoop in with offers of foreclosure relief to capitalize on homeowners’ vulnerability. In reality, they’re just collecting a large upfront fee with no real intentions of helping the homeowner.
4. Rental scams: Scammers post fake property rental ads on Craigslist or social media using photos from other listings to lure in unsuspecting renters. Fraudsters, who have no connection to the property or its owner, will ask for an upfront payment to let your clients see the property (or hold the money as a “deposit”).
5. Moving scams: Your client has found a new place to call home, and now they have to find a way to move all of their belongings. They might fill out a form for a moving company estimate, outlining all their items, and receive an estimate for $4,000 to ship them from their current home to their new one. Once this is done, the “company” will raise the estimate and corner your client into paying more to give their belongings back.