Watch Out for Fake Home Ads

With ever-rising rents, scammers are targeting desperate would-be renters through the popular classified ad website, Craigslist. It is important to watch out for fake home ads more than ever.

Variations of scam with a goal to separate unsuspecting people from their money. Here are a few of the most common:

Credit report scam

The would-be tenant is asked to pay for a credit report, but the advertised property is bogus. It’s either not an available rental or the scammer has no connection to the property. They make their money from the credit reports.

Rent-to-own services

There are two fees the scammer collects to get lists of properties where the owners will rent with an option to buy:

1. Enrollment Fee
2. Monthly “Service Fee”

Aside from the fact that lease options (“rent-to-own”) deal seldom pan out for the tenant, many of these “services” list properties that are not available as advertised.

Cloned listing scam

The home seeker sees a listing for a property advertised elsewhere, but the price is much lower. They are thrilled that they have found a “deal” so they wire a large rental deposit to the “landlord,” who happens to be out of the country “on vacation.” The money, of course, is gone forever.

Some of the warning flags to be aware of:

The “landlord” or a licensed representative is not available to meet you at the property. The “landlord” happens to be out of town (or out of the country) “on vacation,” so they require a deposit to their foreign bank by wire. They offer to rent (and ask for a deposit) without doing a background check on the prospective tenant. The home is “not yet available” to view the interior for some reason. The rent is irresistibly low, so the would-be tenant pays the deposit “to hold the property”. Craigslist is popular for a reason: with so many legitimate buyers, sellers and landlords on the site, consumers have a wide selection of houses for sale or rent, along with items for sale and job listings. Most of these are legitimate.

The site’s administration personnel do a generally effective job of identifying and removing bogus ads. Their job is aided by the many readers who report obvious scams. Still, according to a recent study conducted by New York University, the scams persist; out of more than 2 million articles evaluated over a 5-month period in the study, bogus articles remained on the site for an average of 20 hours before being removed. Even this short time is enough for thieves to fleece the unwary.

To avoid getting taken in by these wily fraudsters, consumers should do (or avoid doing) the following:

• Always view the property—inside and out—in person before agreeing to rent.
• Always meet personally with the property’s owner or a licensed representative, such as a Realtor®
• Check to see if there are competing advertisements for the same house at higher prices. Scammers often rely on consumers’ desire for a “great deal” to reel them in.
• Always beware of the “owner” who can’t meet with you because they are “on vacation”—usually overseas
• Never—and we mean NEVER—send money overseas using a wire or prepaid debit card. This is the same as giving a stranger cash. You will never be able to recover the money Always be suspicious of any listing service requiring hefty up-front payments and subscription fees. There is no assurance that any of the listings they promise are available as promised
• Finally, renters should keep in mind that they may be closer to owning their own homes than they think. All 50 states offer some form of help for first-time home buyers. This may include down payment assistance and below-market interest rates. A conversation with your Realtor® or local lender may open the door to homeownership sooner than you think.