Real estate fraud is when an individual or agency uses false information or misrepresents the information for any real estate transactions. It can happen in various ways and involve multiple parties and sometimes results in a class action lawsuit when there are many people impacted. For example, a seller provided wrong information regarding the size of the apartments they sold. This resulted in many buyers negatively impacted by the fraud.
What are Some Common Types of Real Estate Fraud?
There are many types of real estate fraud. Some of these are:
- Mortgage fraud: the misrepresentation of material information or omission of crucial data related to the real estate property involved that can result in fraudulent transactions.
- Foreclosure fraud: when the home is wrongly foreclosed on, leading the homeowner to think that they lost ownership of their home and results in them moving out and giving up their home.
- Title fraud: when the title (ownership) of the property is falsely changed or occupied through fraudulent methods. For example, an individual sells a property that belongs to another by pretending to be the owner of the property. In this case, the original owner might not be aware of the transaction happened.
- Value fraud: when a buyer is misinformed about the actual value of the real estate property and believing that buys the property. This can be done by misrepresenting or omitting valuable information about the property and its features.
How Can You Prevent Real Estate Fraud?
During any real estate business transactions, there is a chance of real estate fraud at multiple occasions. That's why all the parties involved in any real estate transactions should follow certain steps to prevent real estate frauds from happening.
There are some ways to stop real estate frauds. These are:
- Avoid rushing to finalize any real estate transactions, whether it’s selling or buying.
- Do a thorough investigation of the real estate agents and brokers involved in the process.
- Get an appraisal of the real estate property you plan to buy or sell. This helps in getting the fair value of the property through market prices.
- Understand the details of the property before you proceed with a real estate transaction.
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Do I Need a Lawyer?
Real estate frauds are serious issues and you can incur huge losses because of them. Sometimes, real estate fraud can slip past even the most vigilant and careful of buyers. That’s why it’s always better to take the advice from a real estate lawyer if you are facing problems with any of your real estate transactions.