Carol Blackmon-Grunden, Real Estate Agent with domi agency, shares tips for avoiding real estate scams. Carol talks about a wide variety of scams that target renters, buyers, sellers, and more.
Here is the transcript from the presentation:
Ryan: And years, year over year. All right and so now onto the speaker part of our presentation today.
Ryan: So, October is Cyber Security Awareness Month. And scams are everywhere, and since purchasing a home is likely the largest financial transaction that you will ever have, I wanted to make sure that we invited a real estate broker who could talk about some of the ways that people try to pull one over on you or to get away with a scam when it comes to buying and selling real estate.
Ryan: So, everyone, let’s give Carol Blackmon a hand, and Carol, you have the floor and the ability to share your screen.
Carol: Awesome, thank you.
Carol: Let me get um, share screen. Hold on, let me get it.
Carol: Alright, can you see that?
Carol: OK, you can. OK, awesome I wanted to put this into… slide show.
Carol: I don’t know if it’s going to let me.
Carol: OK.
Carol: Let’s do it, oh, here we go, OK.
Carol: OK, my name is Carol Blackman-Grunden.
Carol: I just got remarried in May, and I’m going to review real estate scams and how to avoid them.
Carol: There are several ways that you can get scammed in real estate, so I’m going to cover a lot of them with you.
Carol: OK, who, real estate can’t, scams can be, their a con artist. They could be in the country. They could be your next-door neighbor. They could be overseas. They could be anywhere.
Carol: Posing as a home agent homebuyer, a real estate agent, a home inspector lender or landlord.
Carol: The one thing they have in common is to use a real estate transaction as a way to get your money.
Carol: OK, there are people that say, I buy houses. Everybody has probably gotten a card or a postcard in the mail, says, we buy houses, I buy houses.
Carol: Technically, these are legitimate, technically. OK, they’re not a good value, and it’s, and it is a type of the scam.
Carol: OK, they find out what your mortgage balance is. They make an offer just above that, so you’ll, you know, try to get out of it and try to get your house sold quickly, but it’s never for the real value of your home.
Carol: And then, or they’ll offer a higher amount just to get you to sign the contract and then they’ll sell the contract to someone else. In most cases, these deals fall apart.
Carol: They never really follow through, and sometimes it takes months for that money, before they’ll close, because they’ll find everything in the world wrong or to extend it.
Carol: So, you’re completely out, OK. If you want to sell your home quickly, please make sure you consult, let me get back here. Go back, sorry. There we go.
Carol: OK, if you want to sell your home quickly, please consult a reputable agent. They know what to do. They know how to market it, they know what’s going on in the market and what you can and cannot get for your house quickly, so just be aware of that
Carol: I have ran into foreign cash buyers. There’s no such thing. There is no foreign cash buyers, they are frauds.
Carol: Every single one of them, but I still have friends that get phone calls off and on about saying, hey, I want to buy your house. I want to buy your house, OK. It’s just like a credit card, gift card, check cashing scheme.
Carol: Has anybody been reached out to by e-mail or phone call and say hey, I’m going to send you a check for 10,000. I need you to cash it. You can keep 8 and you send me 2.
Carol: Anything like that, because I have, being in business I get these every once in a while.
Carol: I get text messages from people posing to be an agent or somebody say, hey, I’m, I’m in a meeting and I need 10 gift cards. Could you please go buy me 10 $100.00 gift cards and I’ll pay you back? No, that is somebody posing to be somebody they’re not. OK.
Carol: So, that’s kind of that scheme, anytime you hear anything like that, avoid it. Do not respond. Do not give them any information. Do not do it, because every single one of these people are not in the United States, you’ll never see the money.
Carol: Home inspection scams. My best advice is to work with an agent if, if you are buying a house and you do a home inspection, but you need to make sure the agent gives you more than one option. Or, if you know somebody, hire the guy that you know, that’s fine.
Carol: There have been cases where and agents have offered one person, here, this is a great guy. This is who I recommend and then what happens in the deal is, that particular inspector overlooks a lot of things just so they can get the house closed.
Carol: And then you find out later, there are several things that got missed. There are latent defects and things like that so, do your due diligence, make sure you are working with an agent.
Carol: I always recommend at least three companies. And every single one of those companies, you can look at, you can check the Better Business Bureau. You can check their reviews and they’re highly recommended and they’ve been in business for years.
Carol: I always recommend at least three. That way you can call, you can make the determination of which one you want to use, so do your due diligence
Carol: Wire fraud. This is huge. Wire fraud is growing like crazy. Hits buyers and sellers and title companies.
Carol: You got people posing as the title company. Or as the buyer or seller, saying, hey, here’s where you need to send the money. So and so forth.
Carol: And then what happens is, they’ll copy that e-mail where it looks exactly like the title companies e-mail, only the account numbers in that e-mail are for an offshore account. It looks identical to the title company.
Carol: They’ve hacked the title companies e-mail and the servers. They get all that information and then the next thing you know, your earnest money or your down payment money for closing, is now in another country.
Carol: This, this does happen. It has happened two or three times in the last year around here. I’m fully aware of. There was one deal. $200,000 ended up in somebody’s offshore account. They ended up not closing and they lost the house. And the $200,000, because it’s gone, so, make sure my, verify.
Carol: Make sure that we do not e-mail wiring instructions as agents. The title companies may e-mail it to you, but, I always specify, get those information, you call the title company directly.
Carol: Speak to- you call them. Don’t let them call you, you, because it could be a fraud. You call a title company, speak to someone directly, verify the account numbers by phone, and don’t do any wiring of funds until you do that, because they are on, that’s the quickest way they can get money, they have figured it out.
Carol: Fake rental scams.
Carol: This is going on as well. I see it all the time posted. Somebody has my listing posted for rent on Craigslist. They’ll take pictures of a home that’s for sale or for rent. Somebody else owns the house.
Carol: They’ll put it on Craigslist or on a Facebook marketplace and say, hey, we have this home for rent.
Carol: This much money a month, and what they do is, they’ll change the e-mail address, they don’t always change the phone number, because they want that phone number.
Carol: They go ahead and call the guy who owns it, and get all the information, but the e-mail goes to them, the fraudsters.
Carol: So, that then, when they’re emailing back and forth, they’re representing themselves as the owner, and then they give the information and they send the application fee. And that never goes to the owner.
Carol: So, make sure that when you’re talking to somebody, you’re actually talking to the owner, verify, do your due diligence.
Carol: I’ve seen people lose, lose a lot of money, they send over deposit money and it went to somebody else besides the owner.
Carol: This is happening in, a lot, so if you got somebody looking for a rental, just make sure you do due diligence and find out that’s exactly the owner.
Carol: So, this is happening a lot well.
Carol: Moving scams, I know. Maybe you’ve heard of this.
Carol: Moving companies will charge substantially more at, when they get you moved, but they don’t, they don’t have your furniture in the house yet. They will keep your furniture until you pay up.
Carol: That has happened to several people over the years. Because sometimes it’s billed underestimated on purpose. And they’ll get the job, because you think, OK, they’re cheaper. They’ll get it done.
Carol: But then when it comes to delivering your furniture, they won’t. You need to make sure, again, do your due diligence. It’s got to be a reputable company.
Carol: There are also companies out there that take your deposit but never show up. That’s happened, that’s happened just recently to someone, not to any of my clients, but it’s happened recently where they gave a deposit. The company never showed up.
Carol: So, be aware of that as well.
Carol: Foreclosure scams. Loan flipping scams. Home mortgage scams.
Carol: A lot of these came about back when the, the housing crash happened, but what happens is, is foreclosure scams. They target the home you’re about to lose, they, scammers help to refinance or modify a home loan to avoid your foreclosure.
Carol: They connect owners to a mortgage relief program and attempt to collect a fee from the owner. They persuade the owners to sign over their deed. And then do a lease back to them.
Carol: What they’re doing is, they’re selling, the owner is selling the house to the company, the company is letting them rent it back and just stay there. No, that does not work that way.
Carol: Work with the lender for assistance. You can also seek HUD approved housing counselor or lawyer.
Carol: Loan flipping. They target senior citizens with equity. This convinces owners to refinance their mortgage repeatedly, borrowing more and more each time to pay high fees.
Carol: Always work with reputable mortgage broker or companies that have high ratings and have been in the business for a long time.
Carol: Home mortgage scams targets those aimed at seeking a mortgage. This includes excessive interest rates and fees, prepayment penalties and or balloon payments.
Carol: Uhm, I don’t know if anybody has heard of a balloon payment on a mortgage, but it has happened before. Where you get this, all of a sudden, you get this really low payment, you’ll sign all the paperwork and then in five years you owe a substantial amount of money that you were never aware of and you pay up or you lose your house.
Carol: So, be aware of the documents that you’re signing.
Carol: Their tactics is loaning more than you can afford. They inflate high values, they do a bait and switch from a promised low interest rate home with no closing costs, but you must pay a high fee.
Carol: That’s the difference. They may offer you a right now, rates are in the sevens. Let’s say they may offer you a 3% rate, but it’s going to charge you $10,000 to get that rate. I just threw that out there, but read all the paperwork.
Carol: If necessary, get an attorney to review all the documents. Have the lender to make sure they are reviewing the truth and lending section in great detail.
Carol: Title fraud. This is becoming on the rise. I’m sure you’ve heard commercials about somebody can take over the deed. Yes, they can.
Carol: They can form, it’s an identity theft, is what it is and they just have to take one piece of paper and a purchase agreement to the county and say, hey I bought this house, I’m the owner, and all they have to do is file the deed and the property becomes theirs and then they can borrow against it and it’s not their house, they can borrow against that loan, therefore making the owner responsible for that loan.
Carol: So, you’ve got to be careful of that, because it is on the rise.
Carol: Selling your home without your knowledge. Believe it or not, it does happen, it happens more with unoccupied properties, rental or vacation properties. They forge the deed into their name, they place the home for sale and sell it to an unsuspecting buyer. And then pocket the money.
Carol: Sometimes they offer to refinance the home, yet the documents are for the sale of your home, so they’ll come to you, and, saying, let’s refinance it. But you’re actually signing a listing agreement to sell your house.
Carol: So, make sure you read the documents, do your due diligence.
Carol: Quick sale companies. They are out there. I’m not going to mention names because some of them are somewhat legitimate, but what’s happening is they are targeting people in pre-foreclosure, wanting a quick sale. Unfortunately, these are mostly legitimate.
Carol: The catch is that their offers are well below market value because the owners tend to be a little more desperate to get it sold, to get out of it and to move on. Uhm, they have actual real estate agents on their staff, but they purchase the homes as a much lower price.
Carol: They’ll turn around and then list it with that agent at a much higher price point. Right now, there’s one company that’s being sued for that exact process.
Carol: Unethical agents, that’s one thing that’s out there that that will save you a lot of money is make sure, when you do hire an agent to represent you, either buying or selling, make sure they are a member of the National Association of Realtors, the Indiana Association of Realtors.
Carol: Don’t sign any documents without the ability to read them in full prior to signing them. And do not sign any document that is partially filled in by a computer and partially filled in with ink.
Carol: That is a big faux pas, no no.
Carol: Just watch for unsolicited offers, if you don’t want an offer, be careful ’cause they come in the mail all the time.
Carol: Lack of documentation, lack of professionalism. Refusing to meet in person. High pressure tactics, unrealistic offers, and last-minute changes.
Carol: The real estate scams’ horrendous, and this is the biggest expense that you will have in your life is buying a home.
Carol: A good real estate agent will take you through the process. They will help coach you through it to make sure you’re aware of every single step along the way and what could possibly happen next.
Carol: A great real estate agent will protect you, through the transaction process.
Carol: So I look for all this stuff.
Carol: I look for the scams. I look for, I look for errors the agents have done that could cost my clients money and make them fix it, so, make sure you’re hiring the right person to do what you need to get done. Again, I’m Carol Blackmon and with the domi agency. I’ve been in the business now for over 9 years.
Carol: Prior to that I was in sales and marketing, and I did that for over 5 years.
Carol: So, I’ve got a huge amount of negotiation experience and real estate business and luxury real estate, residential new construction, investment properties, anything else.
Carol: Does anybody have any questions? No?
Ryan: Carol, so, have real estate scams in general become more prominent in recent years or is this a phenomena that’s just kind of evolved as new technology is introduced?
Carol: It’s evolved. It’s been going on for a while. I mean, back in 2007, 2008, the mortgage scams were awful. There were several people that were taking advantage of, of mortgages and houses they didn’t own. That was a ton to get money. Yeah, but now that technology, you know, even, even scammers, they don’t really go through your trash anymore. People used to go through the trash to get your credit card offers.
Carol: They don’t really do that anymore because everything is online.
Carol: So, it’s, um, it’s, it’s tough, because if the unsuspecting person. You’re not gonna know because everything is online.
Carol: And that’s where I, I educate all my clients say, hey, this is what’s going out there. This is what’s going out there. This is what you need to watch for and this is what we’ll do to protect you.
Carol: So that’s kind of my biggest thing. I actually got into the business because I heard nightmares stories and, and horror stories about how agents treated their clients, or some people they were just in it for the money they went to closing, got the check and ran out the door.
Carol: It’s like no, no, no, no, you don’t, you protect your client. That’s a big one.
Carol: Not just getting them through it. You protect them through it.
Jeannette: Carol, you spoke about the people who go in with a, a deed and claim that you’ve sold your home to them. What agency do we contact and what question should we ask when we do that?
Carol: You would, you would call the, the, the county, the recorder, or the auditor, or the assessor, and then you would count them, and then what you could do, what you would need to do, is do another deed, more than likely, and go to the title company and have it re-filed under your name.
Jeannette: OK, well, we’ve actually have paid off our home so that is a big asset for us. And obviously we don’t want to lose it, how, how prominent is this within Indiana?
Carol: It’s not as prominent in Indiana. But it is out there.
Carol: There’s, there’s very little, it’s, it’s a new scam. Basically, it’s a newer scam that’s just come up over the years. They figured out how to forge documents and just take it to the title company and get the deed in their name.
Jeannette: And the county actually accepts those without any other documentation?
Carol: You have to, you know, well, they take your drivers license, but thing is they are fraudsters, so they’re, they’ve got the ability to be able to forge the documents from your name into their name.
Jeannette: Wow, OK, thank you.
Carol: And, and just recently, I know this is a different situation. I have a friend of mine going through a divorce and I was working with her on the values of their properties, and in that research I did, we found out that her soon to be ex-husband had already removed her name from the property.
Jeannette: Nice guy.
Carol: Yeah, nice guy. So, you gotta watch out for things like that too.
Carol: But the attorneys involved on that, so.
Ryan: Hey Jeanette, another point to make there is that’s one of the reasons why if you get a phone call where they’re trying to prompt you for a yes or no answer, never say the word yes into a phone call.
Carol: Yes, right.
Ryan: You make that recording and supposedly you authorize all kinds of crazy things.
Jeannette: Yeah, I, I heard that a couple of years ago and I never answer yes to any of those questions.
Jeannette: I have, uh, a sign in front of my house that says, taxes, indicating I do income taxes. And I received a call one day and the man on the phone wanted to know if I was selling my house for the taxes that were due on it. It left me speechless. I said no, I do income taxes. Oh well, OK, and he hung up.
Jeannette: It was, I was just, flabbergasted that he would ask that particular question. So, if I’m selling my home for taxes, I’ve got better ways to do it than put a sign in the yard.
Carol: Yeah, really, yeah, it’s, like no. And if they’re selling it for the taxes, somebody else would be doing it, yeah. The sheriff’s sale would do that so.
Jeannette: Right. Thank you for your information. This is a new wrinkle.
Ryan: Any other questions for Carol?
Ryan: So, Carol, one last time. How does someone get a hold of you if they need an agent to represent them?
Carol: Call me at [redacted]. Or my e-mail address is [redacted], so it’s very easy to find me. I’m on Facebook, they can reach out to you.
Carol: And by the way, just in case anybody doesn’t know, I do want to give a testimony to Ryan. He has helped me with Internet stuff. Google Business, show me where to go for posting and things like that. He’s, he’s awesome, so that’s a testimony for Ryan.
Carol: But yeah, just reach out. I’m on Facebook. Everywhere my phone number is public, so.
Ryan: Awesome, Carol, thank you for that.
