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Friday, September 29, 2023

Real estate scams on the rise

By Hailey Sams | SUN Intern

According to a Federal Bureau of Investigation (FBI) report from 2022, real estate scams cost victims $396,932,821 last year, an increase of more than $46 million from the previous year. 

Real estate scams have been on the rise for the last two years, along with most online crimes, states the report, and these scams have resulted in people losing millions of dollars at once. 

Marcie Lewis, a Pagosa Springs real estate agent, relayed that, “I probably got my first call about … three months ago and it was actually a lot I sold somebody. … I knew right away that something was not right,” Lewis said, adding the buyer built a house and the scammer claimed that “there’s no house there.” 

“I’ve actually had several of them,” Lewis said, “and they identify themselves as that person [lot owner] and they give you a phone number and email and … ask you to list their lot.”

While this is the only type of scam Lewis has encountered, there are many types of real estate fraud, according to the Colorado Department of Regulatory Agencies Division of Real Estate, including:

• Title fraud, where a scammer forges a deed on your property and uses it to get a mortgage document on the property. This commonly includes identity theft and mortgage fraud. The scammer does this to make it look like they own your property. 

To protect yourself from this, you can “protect and monitor your identity and credit” and “obtain title insurance which protects buyers against defects in the title, such as liens, fraud and forgery,” according to the agency’s website.

• Wire fraud, where the scammer may try to convince you to wire them money instead of the actual real estate agent or homeowner you’re working with. This includes last-minute instructions on where to send money and how to do so. To protect yourself from this, make sure to verify every instruction you get about sending money, especially if they’re last-minute instructions. Check with a live person on the phone or in person before you send any money. 

“Be very suspicious if you receive a subsequent email or text requesting a change to wiring instructions that you already had received, and always make sure to confirm the escrow account number before wiring any money, and do not forget to call your title settlement agent to verify the transfer of the funds immediately after the money is sent,” the website states.

• Rental scams, where a scammer may post a fake ad to lure people into renting the property. 

“These ads can look very professional and may even be actual photos of the property,” the website states, even when the scammer has no real connection to the property. The scammer may ask for an upfront payment or for you to move in before you even see the house. Be skeptical of any ad you see, and anyone asking for money early or pressuring you to move into a house quickly. 

For more information about real estate scams and other types of fraud, visit https://dre.colorado.gov/consumers/real-estate-scams-and-fraud.

Other tips to
protect yourself

“All the ones I’ve encountered, the people don’t live here,” said Lewis about who may be targeted by real estate scammers. 

Especially in Pagosa, where many homes are second houses or vacation homes, these scammers try to sell houses without the owner having any idea until they find out about someone trying to move into their house and the money’s gone, she indicated. 

If you own a home that you are not consistently visiting or living in, “people should check on their property, make sure there’s not a sign in the yard that they didn’t … know about,” Lewis said.

If payment instructions are suddenly changed or you get an email with new ones claiming that it’s from your real estate agent, call your agent or the owner and confirm, the website states. 

It adds the last thing you’d want is to show up to the closing and be asked for the money that you already sent. Wire transfers are extremely difficult to undo and oftentimes victims never get their money back. 

Lastly, always confirm who you are talking to and that they are a real person, the website suggests. Scammers may be hard to understand or write/speak in broken English. A legitimate owner or real estate agent should be willing to meet you in person. Transactions that happen purely over email should end with confirmation of money transfers and communication with the licensed owner, preferably with an in-person meeting. 

“If they get anything in the mail or a phone call that … doesn’t quite make sense or add up,” Lewis advised, “make sure and follow up on it.”

Real estate agents and title companies are more aware of scams now and have more ways to avoid them. 

“We’re asking for other forms of ID … or a copy of their warranty deed,” Lewis said. “I’ve had good success with finding the real owner and calling them on the phone and then they tell me that it wasn’t them or they’re not in fact interested in selling it.” 

Staying vigilant and skeptical is the best way to avoid real estate scams, and the Colorado Department of Regulatory Agencies states that a good rule to follow is: “If it sounds too good to be true, it probably is.”


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