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Real Estate Investment 101: Avoiding Scams

Oct 20, 2007
"The sad reality is that there are always people out there that are looking for people they can take advantage of. In most cases, scammers will take advantage of those that are already down because those that are already on hard times tend to be more desperate. Since desperation often leads to gullibility, scammers are more than happy to prey upon them in order to make a quick buck.

Whether you are in a desperate situation or not, you are always at risk of being taken advantage of by a scammer if you do not remain continually alert. Therefore, it is best to follow these simply tips to avoid being scammed when investing in real estate.

1. Never send money to an "interested buyer." One of the most common real estate scams is selling to a person in another country. With this scam, the scammer claims to live in another country and says he would like to buy your real estate. There is only one problem: he needs you to send some money his way to pay for travel expenses or some other expense that is standing in his way. Once you send the money to the scammer, he seemingly drops off of the face of the earth.

Remember, you should only be receiving money when you sell your real estate.

2. Never turn over mortgage documents to an "interested buyer." Identity thieves will sometimes pose as an interested buyer and will then request to see mortgage documents. Since these documents often contain personal information such as your social security number, you are essentially handing over your identity when you hand over the papers.

Remember, you should never hand over your personal real estate documents to anyone other than a lawyer.

3. Never continue negotiations with someone that has never seen your real estate. Some scam artists will claim to be interested in purchasing your real estate without ever having seen it. This is simply a ploy to win over your trust so you can be taken advantage of later.

Remember, no honest person is going to invest a large amount of money into real estate without having seen it first.

4. Never complete a deal without the help of professionals. Even if you are dealing with a person on a face-to-face basis, you can still be taken advantage of if you are not careful. Therefore, be sure to enlist in the help of a number of different professionals when investing in real estate. Before you sign any contracts, run them past an experience real estate attorney. Enrolling in a real estate club will also put you in contact with a number of legitimate professionals that can help steer you in the right direction.

Remember, if it sounds too good to be true, it probably is. Use the help of professionals in the real estate field to make sure you are not being taken advantage of.

5. Never put your trust in a handshake. Unfortunately, a person's word and handshake is not enough to keep you out of trouble in the world of real estate investment. Make sure to get everything that you agree upon in writing and don't assume the other person will make good on anything that was agreed upon verbally.

There are plenty of ethical people working within the real estate investment field that will buy and sell real estate honestly and professionally. At the same time, there are some people that are just waiting to take advantage of another person's misfortune. Be cautions and follow these few simple tips and you will not find yourself falling victim to a scam."
About the Author
Kinan Beck is the Broker and co-owner of One Source Realty in Austin Texas. Visit Kinan's Lakeway Real Estate Guide, visit his Steiner Ranch real estate company's website, & his Avery Ranch real estate website. He has seen considerable success in real estate, and looks forward to many more years in the business.
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