You don’t want to get scammed. It probably doesn’t need to be said, but it’s true. You stand to lose quite a bit of money and time, and the psychological effect can be quite damaging as well. Imagine it: You’ve found your dream home, you negotiate a great price, and it all seems too good to be true. Then your realtor skips town with your money and you find out that it was–in fact–too good to be true.
This article is meant to make you aware of some of the scams out there and the steps that you can take to avoid becoming a victim.
1. Hire a home inspector. A home inspector looks over the property to make sure there is nothing unusual about the home. They can help determine if there are any construction, safety, or any other type of concerns that you should be aware of. You also want to attend the inspection so you know they’ve done a thorough job.
2. Don’t deposit money directly to the seller. Most home offers involve a check, which is generally referred to as “earnest” money. It’s basically a way that the buyer expresses his “earnest” intent to purchase the property. Never make this check out directly to the seller. It needs to be deposited with a recognized real estate, title, or escrow company.
3. Do a pre-close inspection. Like the initial inspection, the pre-close inspection is basically used to reassure the buyer that all is still well. If you close on a house that’s burned down, congratulations, you just bought a burned down house. This is your last chance to make sure that things are they way they’re supposed to be. If the seller won’t allow a pre-close sale, walk away. If there is something strange about it, bring it to the attention of your agent or an attorney.
4. Buy title insurance. You would be well-advised to buy title insurance for the full amount of the purchasing price. If there is a title defect or sale fraud, a reputable title company will back your claim that you’re the new rightful owner of the home or they will pay you back the policy limit for losses you may have incurred.
If you’re buying a home from the owner, you need to be extra careful. Scams are fairly rare, but they’re much rarer when you’re working with a legitimate real estate company. If you do your inspections, put your money into escrow, and buy title insurance, your purchase will be pretty well protected.
Have you ever heard of someone getting scammed out of a home sale?
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