Con artists follow money. Given that money is regularly changing hands in the real estate industry – and that this industry is rife with desperate and struggling homeowners (and others), it’s probably not a big surprise that there are a lot of common real estate scams out there – and that these scams can be financially devastating to people.
In this blog series, we’ll take a look at some of the most common real estate scams, as well as the some red flags associated with these scams. While the discussion herein can help you protect yourself against common real estate scams, don’t hesitate to contact Denver Real Estate Lawyer Thomas E. Downey when you need the best representation – and protection – for your real estate legal matters.
With these types of scams, some company will “promise” to rescue a homeowner from foreclosure. Generally, the company will require the homeowner to pay some upfront fees, and either:
These scams typically always end in the owners losing their homes, as they are either foreclosed on or the company takes ownership of them.
Warning signs of this real estate scam can include (but are not limited to) companies:
These scams usually involve overstating the value of a home to generate false equity. Typically, appraisal fraud is linked to other types of mortgage fraud.
Warning signs of this real estate scam can include (but are not limited to) companies/individuals:
With these types of real estate scams, borrowers generally provide false or inaccurate financial information to lenders to try to get better loans (e.g., better interest rates, more favorable terms, etc.). In some cases, this type of real estate scam can also involve borrowers claiming that they intend to live in a home when, in fact, the home will be a rental.
Warning signs of this real estate scam can include (but are not limited to) borrowers:
Understanding these common real estate scams can save you from serious financial losses, an experienced Denver real estate lawyer explains.
With these real estate scams, borrowers who are underwater on their homes may try to feign financial hardship to get lenders to agree to short sales. After lenders agree to short sales, then a partner of the borrower will buy the property for a significantly reduced price, after which the property will then be resold by the borrower and partner at a profit.
Warning signs of this real estate scam can include (but are not limited to) borrowers:
These types of real estate scams can take many forms, only a few of which include:
Warning signs of this real estate scam can include (but are not limited to):
These real estate scams generally involve “flipping” properties by reselling them at grossly inflated prices. Commonly, flipping scams are associated with appraisal scams, as the fake appraisal documents are used to try to justify the inflated home price. Once the home is sold, it will typically be refinanced by the “straw” buyer (who works with the flipper); eventually, the home is allowed to go into foreclosure.
Warning signs of this real estate scam can include (but are not limited to):
These scams are about real estate, but they don’t actually involve real property. Instead, with these scams, people are promised some gift or “insider” real estate knowledge that will help them become “millionaires” or “rich” soon.
Warning signs of this real estate scam can include (but are not limited to) companies:
When you need help resolving any real estate legal matters, you can turn to Denver Real Estate Lawyer Thomas E. Downey. Since 1983, Thomas Downey has been providing individuals and businesses in the Denver Metro Area and throughout the U.S. with the highest level of legal service for their litigation, property tax and real estate legal issues.
To learn more about your rights and options, as well as our various services, call us at (303) 813-1111 or email us using the contact form on this page. From our law offices in Centennial, we serve clients throughout Colorado and the U.S.