Caveat Emptor, But It’s Not Just Buyers That Need To Beware

Lately I have been hearing more and more stories of tenants being scammed by people that pretend to work for or be the owner of a property for rent, taking money and in some cases even allowing them to move in to a property that is not really on the market for rent.  There have been several stories in the local news about this, and many on the internet.  I can’t say that I am actually surprised.  With all the properties that have been abandoned in these last several years, it was bound to happen.  The perpetrators gain access to the property, change the locks and list it online on Craig's List or similar sites.  They sometimes prepare phony leases and  ask the tenants to pay in cash, or money order, or do a wire transfer.  They may even go as far as pretending to be a real estate agent or broker.  Some of these properties are on the market for sale and somehow the scammer gets access to the lock box, or they may have been in foreclosure for years, and no one ever comes to check on them. In some cases the scammer just disappears after collecting the rent, never giving the tenants the keys, or they list a fake property, with tons of amenities on the web, for a really cheap price and with no photos. 

 

I had an owner call me a couple of weeks ago.  I used to manage his property about six years ago. We had rented to a family, with good jobs and good credit, and they lost their jobs, stopped paying and trashed the property. We had to file an eviction, and by the time we had possession back, the house was in really bad shape.  The owner did not have the money to make the needed repairs to make it rent-able again, and was starting the process of a divorce.  He said he was going to just let it go.  Fast forward six years, I hear from him, he wants to know how the current  rental market is. He is considering renting the property again, but has not even seen it in five years.  I looked it up, it has been in foreclosure for all this time.  This property is in a pretty nice area, and has a good amount of privacy. It would be the perfect home to use to pull a scam. Hopefully no one has.  He says he will be in town in the next month or so, and is going to check it out. Hopefully it will be empty. 

 

So what can a potential tenant do to protect themselves?  For one thing, they could only consider rentals that are listed by a real estate company.  But prior to giving the person any money, they should verify their license on the DBPR website(in Florida) or who ever is the licensing board in their state, if unsure they can contact the local Board of Realtors, and ask them. Once verified, hopefully the listing agent has already done their due diligence and confirmed that the person that signed their listing paperwork is indeed the owner, and that the property is not currently in foreclosure.  If they really want to rent a home that is listed by a private owner, they could do their own research and make sure the person renting it is who they say they are.  They could start out by asking the person for ID.  They could then look up the property on the Brevard County Property Appraisers website and once they verify that person owns it, they could check the Brevard County Clerk of the Courts site to see if there is a foreclosure filed. If they really want to be sure, they can drive by the property at different times to see if there is anything suspicious going on, like the property is still being shown, even after they were approved and paid their deposit.  A scammer is most likely not going to stop at one.  They can also talk to some neighbors, who may know the owner and/or the situation that is going on with the property.  Lastly, they should use common sense, if something seems too good to be true, it probably isn't. 

 

So what are some red flags for that may indicate a scam? 

1. The "agent" or "owner"  walks up to the house, and there is no sign or their vehicle.  They do this, so you can't get their license plate number. 
2. Their is a sign in the yard, but the "agent" or "owner"  tells you not to call the number on the sign.
3. The "agent" or "owner" seems nervous, can't answer questions about the property, asks for cash only, or wire transfer only. 
4. The "agent" enters through a door, other than the front.
5. The price for the home is far below market.  Do some research, what have other comparable homes in the area rented for? If the average price in the area, is $1200 and they are asking for $800, something is probably not right. 

It's sad that things like this happen.  So keep in mind, caveat emptor, but it’s not just buyers that need to beware.