With a historic number of foreclosures sitting on the market, scammers posing as landlords are preying on vulnerable potential tenants.
And they are getting away with it.
They find unoccupied homes and list them for rent at lucrative rates on websites such as Craigslist; once they have pocketed the rent and deposit money, they vanish.
“I am seeing this all over the place,” says Robert OHara, real estate agent with Re/Max, Flossmoor, Ill. “The rental market is tight and it’s all about the money.”
So, how does this work? In many cases, the con artists find homes, which are already listed for sale or rent by owners. They lift photos and descriptions from real ads and repost them on Craigslist and other websites under their name. They create new email avatars and tell their victims that they have to relocate and need to rent their home immediately. Sometimes, they even look up tax records and open e-mail accounts using the real owner’s name.
Oh, and that “for sale” sign on the front yard with a real estate agent’s information? Ignore that, they tell their victims. They just haven’t gotten around to taking it down.
The scammers even encourage the victims to drive by the property to check it out. They often tell them that keys would only be handed over once they mail in the security deposit. Sometimes they would go to the extent of changing locks in the house, and victims don’t realize they have been duped until much later.
Rusty Miller, a real estate agent for Betsher and Associates, licensed in Maryland, says someone recently used his property listing and robbed an elderly woman of $5,000. Miller is now trying to get the word out so others won’t fall prey.
The rental scams are happening all across the country. There’s no way to find out the exact number of fraudulent incidents that have happened, but the stories are pretty similar, and they occur frequently.
“I think what’s driving it is there are more foreclosed properties sitting on the market than we have seen historically,” says Robert Hagberg, Freddie Mac’s associate director of fraud investigations. “It’s like a typical fraud scheme, one person gets to work and then others jump on board, and it gets contagious.”
From California to New York, Freddie Mac alone has approximately 50,000 homes listed for sale, under contract or being readied for sale. Real estate agents, contractors and other home representatives can’t babysit these homes around the clock, thus providing a fertile ground for the con artists. Hagberg says there were more rental frauds reported in the last few months than in 2011.
Here are a few tips on how to guard yourself against scammers when you are shopping for rentals.
• Hire an agent, or go through a property manager: It’s always better to have a professional by your side, OHara says. There are specialized agents handling rentals, and they’re knowledgeable about properties in the market.
• Don’t go alone: If you like a home that you found on the Internet and decide to go see it, be cautious. Take someone with you when you visit a rental property, and don’t carry any cash, Miller says.
• Speak to neighbors: Residents in the community are often aware of what’s going on with homes in the neighborhood, and they could be your best source. Knock on a few doors and inquire about the property before dropping any money.
• Hire an attorney: Lawyers cost money, but they can do an asset search and dig up information on property owners. They can find out who the homeowners are and if they have any assets in their name.
• If you see a “for sale” sign on the property with a seller’s information, call the number or try to find out more about the seller. “That’s the easiest one,” Hagberg says. “And before you send money or give out any information about yourself, look up the county records. If they are making an effort to steal your money, there’s no guarantee that they won’t steal your identity.”
• Lastly, if the rent price listed is too good to be true, it probably is. Do your research on the going rates on similar units and homes in the area. If the listed price looks like a steal, that should be the first warning sign.