Both buyers and tenants looking for their dream home can fall for real estate scams. Some real estate offers sound too good to be true – and this is usually the case. So instead of jumping at tempting real estate advertisements, you should first make sure that you are dealing with a serious offer.
In this article you will find out what real estate fraud is all about, how to recognize fraudsters and dubious advertisements, what scams the fraudsters use and how to react if you suspect fraud. We also look at the best way to proceed if you fall into the trap.
What is real estate fraud?
Real estate fraud usually consists of fraudsters placing a false advertisement online. These are copies of existing advertisements or cobbled-together exposés. The advertised property usually does not even exist or does not belong to the fraudster. Real estate fraud is also known the other way around, for example in the form of
Rental nomads
who pose as reputable tenants but in reality have no intention of paying the rent.
The intention behind real estate fraud is to take money from you as a buyer or tenant. By requiring you to pay for a viewing, deposit a reservation fee or transfer an amount before the contract is signed, the fraudsters receive money without providing anything in return.
Sometimes real estate fraud also has more far-reaching intentions. Be it identity theft, copying credit card details or artificially inflating offers, great care must be taken with valuable objects such as properties.
How can I recognize a real estate fraudster?
The scams of real estate fraudsters are becoming more and more sophisticated and it is often not easy to recognize them. However, there are some indications of real estate fraud. Look out for these signs:
- Too low priceA very attractive or even significantly below market value real estate price may indicate a fake advertisement. Although there are sometimes serious bargains, you should always take a close look when prices are low. Also consult the local rent index to estimate the price.
- Glossy pictures like from a brochureMany advertisers invest in a professional photographer. However, if the property resembles a hotel or looks like a stock image, skepticism is warranted. Photos of unnecessary details such as furnishings or doorknobs can also indicate that something is wrong with the property.
- Unusual architectural style: False real estate ads show a building style that is unusual for the neighborhood. Therefore, familiarize yourself with the area. If this is not possible in person, you can use a service such as Google Street View to see whether or not the advertised luxury property fits into the area.
- Wrong addressIn any case, check whether the address of the property on offer even exists. If it is there, it is worth driving past it once. This allows you to see whether the photos match the real house view.
- Missing informationSerious real estate ads contain detailed information. This includes, for example, the warm and cold rent and an energy performance certificate. If you only see the warm rent or if even this is missing, this is cause for suspicion. Information on energy consumption is also very important, especially when selling a house.
- Missing contact personCheck whether the ad contains a contact person and google this person. In the case of false advertisements, the provider often sounds strange or is stated in a vague manner.
- Strange e-mail addressFraudsters often use conspicuous email addresses that end in domains such as @deine-casino-wette.ch or similar. This can also be an indication of real estate fraud.
- Bad GermanTexts in incorrect German may indicate dubious offers. Fraudsters operating abroad sometimes use translation programs. A request in English should also set your alarm bells ringing.
How can I recognize dubious real estate ads?
Unfortunately, it happens time and again that dubious advertisements are published on real estate portals. As the fraudsters have good scams, these advertisements are not so easy to recognize. In addition to the indicators mentioned, such as a price that is too low, there are a few other signs that will help you to recognize dubious offers.
The demand for advance payment is a major alarm signal. As soon as you are asked to pay money in advance, there is reason to be skeptical. Whether it’s for sending the keys or for a viewing, a reputable provider will not ask for any money before you have even viewed the property.
Also pay close attention to any inconsistencies between images and text in the
advertisement
. Take your time to compare the two. If you are suspicious, use Google’s reverse image search, where you can upload the images from the ad. This allows you to see whether they have been copied from another page.
Google is also your friend and helper when it comes to the ad text itself. Many fraudsters copy ad texts from real advertisements. Therefore, enter parts of the text into a search engine and check whether the same or a very similar ad appears elsewhere with different contact details. Then caution is advised.
Last but not least, you should never transfer money to a foreign account number. This is because fraudsters often hide behind an anonymous address or an anonymous account abroad. Pay attention to the country code in the bank number and only part with your money when you are sure that the offer is legitimate.
How secure are real estate portals?
In principle, real estate portals are quite secure. They employ professionals who sift through the ads to identify fraudsters. However, more and more fraudsters are so professional that it can take a while before they are exposed. You can view suspicious ads on the “Protection-from-real-estate-fraud” page. You will also receive further advice there.
What scams do fraudsters use?
Stories in which fraudsters use clever scams to convince their victims are becoming increasingly common. Emotional blackmail is particularly common here. Stories about a sick mother, a death in the family or a separation are used by clever scammers to make you a seemingly accommodating offer. This could be, for example, that you view the apartment on your own and the owner sends you the keys in return for an advance deposit.
The fraudsters exploit the reticence and empathy of many people. To make life easier for a seemingly suffering property owner, many people would make a compromise. Often, however, the apartment does not even exist – and if it does, you will probably not receive any keys.
The imagination of fraudsters is sometimes very creative. Stories about jobs abroad, research stays or financial emergencies should activate your warning lights. Also refrain from accepting contact with foreign banks or agencies.
What to do if fraud is suspected?
If you recognize the warning signs in good time, you won’t fall for the scammers and their scams. Remember, despite all the temptation, to keep your hands off the seemingly attractive property. Never give out personal information such as your date of birth, address or even your bank details.
Immediately inform the real estate portal where you see the incorrect ad. This is done via customer service. By taking screenshots and specifying the ad number, you can also track ads that have been deleted at a later date to prevent repeat offenses.
The real estate portal should then delete the corresponding advertisement to prevent further damage. This often leads to further investigations and sometimes even involves the police. Also remember to share your findings with friends and acquaintances so that they can also be warned and prepared for the scammers’ tricks.
What should you do if you have fallen for the scam?
Unfortunately, it sometimes happens that tenants and buyers fall for a fraudulent advertisement despite all due caution. In this case, inform the real estate platform immediately and file a complaint with the police. This is the only way to catch the fraudsters.
Victims of real estate fraud often do not receive the money they have already transferred. You should therefore never allow yourself to be put under pressure when looking for a property. In particular, you should only transfer higher amounts once a notary has been consulted.
After the transfer, you can also request a chargeback from your bank. You are not entitled to this, but some banks are accommodating. In the case of direct debit payments, you may request a refund within eight weeks.
If necessary, also contact a lawyer who is familiar with real estate fraud. Experts in IT law can also often help. In this way, you can avoid even greater damage. Ideally, the real estate fraudster will also be caught when the property is sold or rented, so that no other people have to suffer from the housing fraudster.
Tip: Further Read more mistakes when buying real estate and how to avoid them here.
All data are without guarantee. The information on these Internet pages has been carefully researched. Nevertheless, no liability can be accepted for the accuracy of the information provided.
