Real estate investment is a proven path to increasing wealth. Unfortunately, this investment strategy attracts some unsavory characters. Real estate scams are all too common, and those who fall victim can find themselves caught up in expensive legal battles that go on for years. Understanding the scams investors encounter most frequently and learning reliable methods of staying a step ahead of con artists are the best ways to protect yourself and your financial future.
Advances in technology have made buying and selling real estate faster and easier, but this convenience comes with risk. Thieves are targeting all parties involved in real estate transactions by hacking computers and email to collect sensitive electronic data. Follow these few simple steps to outsmart all but the most persistent hackers.
- Ensure your email is encrypted. If this is not possible, do not send sensitive identification information electronically. This includes details such as a social security number, income information, credit reports, and account numbers.
- If you receive a request to send funds electronically or through a wire transfer, call the requester to confirm. Be sure to use the number you have on file, not the number in the email. Sophisticated criminals can send very convincing messages that appear to come directly from your agent, attorney or other service provider.
- Keep your computer secure by maintaining up-to-date virus and firewall software. These programs offer excellent protection for all of your information, including data related to your investment property purchases.
- Even if you have virus and firewall software, remember that hackers evolve quickly. Continue to take standard precautions to protect your computer. For example, do not click on links or open attachments unless you are certain they are legitimate. Innocent-looking links and attachments can hide viruses and spyware.
- If you don’t need a password to log in to Wi-Fi, that wireless service is not secure. Avoid conducting any financial business over unsecured Wi-Fi.
- Change your passwords often, and ensure they are hard to guess. Use a combination of upper- and lower-case letters, numbers and special symbols that make sense only to you.
Though many scammers choose to hide behind their computers, there are still plenty of people intent on cheating you face-to-face. Trust your instincts and follow basic precautions to ensure you don’t become a victim.
- Don’t give in to unreasonable time constraints. Sometimes, intense pressure to close a deal quickly is a technique to make sure you don’t look at the details too closely. If someone is pushing you to move too quickly, don’t be afraid to let the deal go. Reputable agents and sellers won’t try to force you into a purchase you aren’t comfortable with, so don’t hesitate to push back or move on when it doesn’t feel right.
- Do a mini-background check on your Realtor. Some scammers go to great lengths to appear legitimate, complete with websites, social media profiles and more. Check your state’s real estate licensing board to get up-to-date information on license status and complaints.
Real estate investment is an excellent opportunity to increase your wealth and create a secure financial future. Don’t let swindlers take it away from you. With a few common-sense precautions, you can keep from falling victim to the most common real estate scams.
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