Anyone who handles monetary transactions seems to be subject to endless scams these days. Realtors, buyers, rental management, renters and everyone dealing with the housing industry are all subject to fraud, as well.
What are some of the things buyers should watch out for when looking for a house or apartment and what can be done to minimize risk?
If the rent or selling price seems too good to be true, take the time to check it out. What is the usual number for the same or similar accommodations in the area? Check out comparable apartment/house listings in local newspapers or online through sites such as Trulia or Zillow. Just because the asking price isn't in the ballpark doesn't mean it's a scam. Likewise, an appropriate asking price doesn't mean the listing is on the up-and-up. However, it's a good place to start.
It's rare that a rental agent doesn't have notice of a vacancy coming up, so immediate occupancy could be a red flag. Ask why the notice is so short, it could be that the tenant moved out suddenly in which case you want to know if there was a problem with the residence or something else crucial; if the manager is reluctant to answer, be suspicious. Another red flag is not being able to see the inside of the home or being unable to answer questions about the area, zoning or tenant association rules -- an authorized representative to rent or sell should be able to provide that information.
Ideally, the landlord or real estate agent is local and will be able to meet with you in person to show you the property. Assume that something is off if everything has to be done via internet, email or text. If you aren't able to see the interior, chances are you probably should move on. Often the person who places a scam ad through the internet is not even in the same country. Check the language in the ad. Do you see a lot of misspellings, poor grammar or a serious misuse of local idioms?
Read through a lease or sale agreement very carefully, or have your lawyer check it out. (You should have a lawyer if you are buying real estate). Make sure it sounds authentic, gives you what you are paying for and has the correct contact information of the landlord or rental management. Do not mail money, checks or money orders if everything has been done long-distance. Do not disclose your credit card or bank information so that the "seller" can debit your account (use this info only for a verifiable credit check), and pay only for the fees accounted for in the lease.
It's not only buyer beware out there.
Be wary of accepting offers to buy or rent property online and sight unseen. While there might be the rare instance that someone from out of town wants to rent locally for business or a family emergency, most people will want to see what they are renting firsthand. If everything seems to check out and you do come to an agreement, be firm about how you receive payment. No transaction should be considered complete until checks clear and the money is in your account.
Typically, your bank will clear a deposited check between two to five days; large deposits can take up to 10 days to clear. Even if funds are made available for your use, there may still be a time period where the check can be canceled or recalled, or could be found to be a phony check or money order. Check with your individual bank on how long before the deposited funds will be yours.
There is a popular scam where payment is made by check or money order for a figure higher than it should be; the payer then requests that the recipient refund the difference. Demand the correct amount but if, for any reason, you do have to refund anything, make sure that the money is sitting in your bank.