A sharp increase in the use of online apartment rental applications since the start of the coronavirus pandemic has caused a consequent jump in red flags for fraud.
The percentage of so-called fraud triggers detected by TransUnion increased by nearly 30% from March to August, according to the credit reporting agency.
Real estate and mortgage fraud were two factors that contributed significantly to the demise of the American housing market a decade ago, and these unethical practices became more commonplace in the most active regional markets. Even though regulation and oversight have largely improved the real estate markets, scammers are always on the lookout for opportunities to ply their wicked trade.
In a Boston condo seller’s market such as the one we’re having now, prospective Boston condo buyers should be aware of certain situations that could put them at risk of fraud. Here are five real estate scams you must avoid as you look at condos, lofts, or penthouses for sale in downtown Boston.
CNBC reported on this real estate scam last year. At a time when Boston condo buyers are finding few mortgage options that allow down payments lower than 20 percent of the purchase price, hackers are trying to breach email accounts so they can intercept wire transfers. In most cases, hackers will send a fraudulent email message to the buyer with a change of wire instructions. This message will appear to come from the title agent in charge of the closing. To avoid this scam, Boston condo buyers should confirm wire transfer instructions in person or over the telephone.
Scammers who take advantage of For Sale by Owner listings often present homebuyers with a rent-to-own proposal that is too good to be true. In many cases, these fraudsters impersonate sellers of vacant properties that do not belong to them. The most sophisticated crooks resort to identity theft, but they are usually flushed out with a title search.
3. High Appraisal
In this scam, sellers produce a copy of an appraisal that indicates a property value thousands of dollars higher than the listed price. In a seller’s market, this situation will not make financial sense even if the homeowner is in a rush to close the transaction, and there is a chance the seller’s appraisal is a fake document.
Although this real estate practice conforms to property transfer laws, it is currently under investigation in various states. Instead of signing a mortgage, buyers are pressured into signing a contract that obligates them to make improvements to a property that is falling apart. The onerous fees and outrageous conditions are designed to make buyers fail on their contracts and transfer the title back to the seller, usually a real estate investment company, after a few months.
This scam is more likely to be pulled by a mortgage broker working with a condo builder. A construction loan offer is made and easily approved with favorable terms and conditions. When the unit is finished and ready for occupancy, the broker will push the mortgage applicants to agree to new and unreasonable fees, terms, and conditions. Buyers should not limit their mortgage options to a sole broker.
Back Bay new condos for sale
Beacon Hill new condos for sale
Charlestown area new condos for sale
Navy Yard Charlestown new condos for sale
Dorchester new condos for sale
Fenway new condos for sale
Jamaica Plain new condos for sale
Leather District new condos for sale
Midtown new condos for sale
Seaport District area new condos for sale
South Boston new condos for sale
South End new condos for sale
Waterfront new condos for sale
North End new condos for sale
West End new condos for sale
East Boston new condos for sale
Back Bay area condos for rent
Beacon Hill area condos for rent
Charlestown area condos for rent
Navy Yard Charlestown area condos for rent
Dorchester area condos for rent
Fenway area condos for rent
Jamaica Plain area condos for rent
Leather District area condos for rent
Midtown area condos for rent
Seaport District area condos for rent
South Boston area condos for rent
South End area condos for rent
Waterfront area condos for rent
North End area condos for rent
West End area condos for rent
East Boston area condos for rent