Although scams may not be the first thing that you think of as home sellers or homebuyers, the reality is that scammers are a popular problem in the real estate market. There are a number of scamming situations that being aware of can save you money, time, and a range of undesired consequences. To avoid house buying scams in VA, it’s essential to be familiar with all the different types of house buying scams in Virginia.
In this article, we’ll help you by exploring the topic in more detail. We’ll look at escrow wire fraud in Virginia, loan flipping scams in Virginia, real estate agents without licenses, how to spot house buying scams, and more. We’ll also share with you a list of Virginia Fraud Resources that may come in handy if you do find yourself in an unexpected situation. The cost of selling a house could rise dramatically if you experience house buying scams that you’re not prepared for.
So let’s dig a little deeper and get to know the different types of house buying scams in Virginia.
Types of House Buying Scams in Virginia
House buying scams are a common struggle for people involved in the real estate business in America. Yearly, there are more than $150 million in real estate fraud losses that both homebuyers and home sellers are exposed to. House buying scams could be a result of a hacked email account, misuse of data, or a gap in security. It could be a result of working with a real estate agent without a license. We’ll share with you some of the most popular types of house buying scams in Virginia in hopes of helping you stay protected.
We Buy Houses Scam in Virginia
We buy houses scams in Virginia start when a house seller receives a notification from someone who claims they buy houses. For instance, you could receive a mailer or see an ad that reads” we buy houses in Norfolk” and be tempted to respond. However, the reality is that the company or individual that actually sits behind this type of advertisement or mail is a fraud.
The aim of this activity is to manipulate home sellers into signing over control of their homes. As a result of the deal, the company would take over the property and lease it out to a new tenant, stripping the homeowner of any authority or possession over the property. The rights to the home are lost but the original homeowner is still obliged to take care of the mortgage payments. The we buy houses scam in VA is not only aimed at house sellers. It can also negatively impact tenants and homebuyers alike.
Escrow Wire Fraud in Virginia
The escrow wire fraud is exactly what it sounds like. You receive a phone call, a text message, an email, or another type of notification from someone who presents themselves as representing the title or an escrow company. They instruct you to wire your escrow funds and provide all the necessary details. Although everything may seem perfectly fine, the reality is that without double-checking the received information, it’s not advisable to take any actions.
Scammers oftentimes create fake websites imitating the title or lending company’s website that you’ve partnered with. Fraudsters have experience in perfectly replicating information so that you end up believing that they’re the legitimate company that you’re working with. They’re able to create fake phone numbers, website, email addresses and make them look nearly the same. There’s always one number or letter that doesn’t match but most people don’t inspect every single element of the provided information, which is only natural.
Once you follow the instructions and wire the money, you will soon realize that you’ve suffered an escrow fraud. The money you’ve sent will most likely end up in an offshore account, where it will be received by the scammers.
Loan Flipping Scam in Virginia
Another type of house buying scams that it’s worth knowing about is the loan flipping scam in VA. Under this scenario, a fake lender encourages a homeowner to refinance their mortgage a number of times. The refinancing is often wrapped around borrowing a larger amount of money every time. The homeowner is charged high fees for every new transaction, finding themselves in a dead-end with high loan payments that they can’t make on time. In the end, the homeowner is tricked into borrowing the majority of the property’s equity.
One of the most vulnerable age groups to this type of scan is the elderly or people who’ve suffered memory loss or impairment. This is because they’re aware of the large home equity that they have and oftentimes don’t realize the scam, allowing the scammer to make a huge profit. The motive for the homeowner to engage in this type of deal is that the lender promises to find a more beneficial loan or offers cash-out refinancing for property renovations or repairs.
Foreclosure Relief Scam in Virginia
Foreclosure is an unpleasant road to take as a homeowner and most people will explore every avenue to avoid the process. Scammers who can access public records can take advantage of this vulnerability and offer a way out via foreclosure relief. The idea behind the relief is that the homeowner is manipulated into paying a large sum of money to scammers, who promise to help them save their property and avoid foreclosure.
Oftentimes, such frauds are made possible due to affiliations with the government or certain programs.
Property Plastic Surgery
A scam that affects homebuyers in Virginia is property plastic surgery. There are a number of useful tips for selling your house for the first time and one of the most commonly seen ones is ensuring you prepare your home for the sale. This includes repair work for any damage that has been caused to the property or taking care of some minor issues like stained wall paint, a pest infestation, or restoring your damaged carpets.
Most homeowners will follow the professional way of working and will list the property for sale once all problems have been dealt with. However, as a homebuyer, it’s recommended to always double-check to ensure you’re receiving a realistic picture. If there are any cosmetic changes in the property, make sure they’re not simply a cover-up for something a lot more serious underneath the surface. Ask to see proof or inspections conducted in the property and question anything that seems a bit off.
Real Estate Agents without Licences
Regardless of whether a real estate agent has an expired license or no license at all, the reality is quite similar – you’re most likely dealing with a fraud. Before you start working with a real estate agent, make sure that you’ve done your research and you’ve requested documentation and proof of their certification and qualification for the job. Just because you’ve read a few nice reviews online and you’ve checked their website or their Facebook page does not guarantee that you’re working with a legitimate professional.
Real estate transactions are a big deal as they’re time-consuming, involve a lot of money, and could easily backfire against you if you’re working with a fraud.
Spotting House Buying Scams in Virginia
Spotting a house buying scam early on could save you a lot of trouble, both financially, legally, and emotionally. Identifying house buying scams could happen in a number of ways, as long as you know what to look out for. Even the most experienced scammers can be revealed with a bit of research and attention to detail. If you’re wondering how to identify a house buying scam, here are a few important things to look out for:
- The selling price that is advertised for a home for sale or for rent is much lower than other similar properties in the same area.
- You’ve noticed grammar and spelling mistakes on the ads for the property.
- There is heavy use of capital letters in the advertising.
- The real estate agent or person involved does not want to introduce you to the house seller or housebuyer. They demand to be the only one communicating with both parties separately.
- You are not permitted inside the property for a viewing or you’re asked to pay a fee to do so.
- You’re asked to sign documents that you haven’t had the time to familiarize yourself with.
- You feel like you’re being pressured into making quick decisions without having the time to research or decide.
- When working with a real estate agent, they refuse to show you proof of their qualifications or license.
The more you inform yourself about house scamming cases, the higher the chance that you quickly learn how to spot a house buying scam and avoid falling for one when it comes your way.
Virginia Fraud Resources
If you’re suspicious that you may be a part of a house buying scam in Virginia, there are a range of institutions and organizations you can turn to for help. Even if you’re just looking for information on types of house buying scams in VA, it’s worth contacting one of the reliable fraud resources available to citizens. The following list of Virginia fraud resources can help you if you’re looking to report mortgage fraud, predatory lending scams, identity theft, and other house buying scams:
- FBI Field Offices, Mortgage Fraud
- Virginia Department of Agriculture and Consumer Services
- HUD Field Office
- HUD Regional Office
- State of Virginia Corporations Commission – Bureau of Financial Institutions
- Nationally Chartered Credit Unions
- State-Chartered Credit Unions
- Savings & Loan Association or Savings Bank
- National Fair Housing Alliance
- Virginia Real Estate Board
- Virginia Real Estate Appraiser Board
- Better Business Bureaus
Avoid House Buying Scams In VA
House buying scams are unfortunately a reality in most parts of the world. Being aware of the scamming options and scenarios practiced most often will put your a step ahead of scammers and will help you identify the threats before it’s too late. We hope that this article will be of use in informing you about the different types of house buying scams in Virginia. If you’re interested in learning more about the topic, we invite you to take a look at our case study.