6 Common Scams Targeting Real Estate Agents
Real estate agents might be the first people to be able to detect something fishy — and we’re not just talking about the strange smell coming from an old home someone is trying to flip. Even though agents might easily be able to tell whether or not something is a scam, the scammers themselves have gotten more sophisticated with their techniques. As an agent, it’s important to always be aware of new types of scams that are out there, so you can recognize it when it comes.
1) Email Hacking Scams
A scam that the real estate community is seeing more frequently these days has to do with hackers getting into your email. Many agents exchange important information with their clients via email. When it comes to the time to send discussed closing costs and for clients to send over money for a down payment, this is when hackers find their way in. They can hack into your email and send your client different information as to where the client should send their money. This is just one of the ways both you and your clients can be fooled.
How to avoid falling for this scam: Always send emails with important documents through certified email and make sure your clients know that you will only ever correspond with them via your own email address. Explain to them that many agents have been hacked and you need their support to make sure both parties are protected.
2) General Cyber Scams
These days, real estate agents conduct most of their business online. Whether it’s communicating with clients, posting listings on your website, or using social media to advertise, this can leave you very vulnerable. If you’re not too careful, it can be very easy to accidentally download Malware or viruses that hackers can use to steal your sensitive data and the data of your clients. One of the biggest scams in this department is when “potential clients” send you an email or text interested in your services, which contains a link that can hack your device.
How to avoid falling for this scam: Make sure you patch up any holes in your security plan that could be making you vulnerable. Practice standard internet security measures, for example, using different passwords and two-step verification when necessary. Don’t click on any emails from sources that you don’t recognize or that look suspicious. Generally, your email provider will notify you or automatically put an email in the spam folder if it picks up on this. Additionally, real estate agents should always practice cybersecurity compliance and can do so by hiring a third-party.
3) A Housing Condition Scam
A housing condition scam probably isn’t news for most experienced real estate agents. This is when the seller (and sometimes the seller agent) do not properly disclose any problems that may exist within the home, especially those that could significantly lower the value of the home. This can also go for safety and code requirements. For instance, according to Scam-Detector.com, sellers have been known to swap our traditional breakers for arc fault breakers inside of electrical boxes, which are known to start fires. They do this to save money on the renovations necessary before flipping or selling a home, which is not only fraudulent but dangerous.
How to avoid falling for this scam: Always send in an inspector at several stages throughout the buying process, and have them check specifically for these kinds of things. Take photos as evidence.
4) Advertisement Agency Scams
This one may not be as serious as the others, but it is still happening quite often. An advertisement scam is one that’s targeted directly at the real estate agent. It involves a scammer pretending to be a website, local newspaper, or magazine, with an offer you can’t resist in order to advertise your services or homes that you are listing. You pay them a price — which may not seem too high to you, but it adds up — and they never make an advertisement for you anywhere!
How to avoid falling for this scam: If someone reaches out to you for this in general, it probably is a scam. Even cross-checking names might not work, because it’s likely that they are using a fake name. If you want to advertise somewhere, it’s best if you are the one to reach out to them.
5) Impersonation Scams
Impersonating an editor of a magazine isn’t the only type of impersonation scam that’s happening. These scams are occurring across many different industries, but they are increasingly common in real estate. First and foremost, there have been many instances in which scammers impersonate lawyers. Because there are so many parties involved in the buying and selling process of a home; it only takes one scammer impersonating one of those lawyers to hack the entire system.
Additionally, there have been many instances when scammers also impersonate real estate agents — meaning, you! They’ll use the information you have online to create an almost identical profile, to scam as many people as possible. This may not affect you directly, but it can certainly give you a bad reputation in the process.
How to avoid falling for this scam: Always check the credentials of people you work with. Meet them in person if possible, and if you can’t, video chat with them. Use a certified email. To prevent someone from impersonating you, keep as many of your accounts private as possible, and make it so no one can copy your picture.
6) Open House Scams
Open house scams have been happening since the beginning of time, and can actually be quite dangerous. This is a different type of scam in the sense that you could potentially face a physical encounter with a criminal. When robbers or dangerous people catch wind of an open house, they can show up where they are not welcome, and who knows what they might do.
How to avoid falling for this scam: Practice real estate agent safety measures as much as possible. Keep the door locked, even at an open house. Bring someone with you to the open house if applicable, and ask those interested to sign up beforehand.
Do you know of other scams targeting real estate agents? Have you ever fallen victim to one of these? Let us know in the comments below!