Real estate scams are nothing new. Over the last few years, many scammers would use vacant listings (often bank owned or short sale properties) as a front to show and collect security deposits from unsuspecting renters. Others use a rental application to steal and sell the social security numbers of tenants, all while the tenant is unknowingly squatting. However, this is the first time I’ve ran across one of these listings targeting home buyers.
The original listing appeared the real estate site Zillow under the For Sale by Owner tab. The home, 404 Magnolia Birch Ct in Cary, is owned by American Homes 4 Rent and is available for lease for $3650 per month.
The scammer used the photos to create a secondary listing in the For Sale By Owner category, added the appropriate facts, authenticated as the homeowner (which isn’t difficult to do on Zillow) and listed the property for sale for $90,000 (or to rent for $1000 per month with $1000 deposit). Other homes in this neighborhood have sold as high as $675,000 so you can see why $90,000 would be too good to be true.
The scammer also gave the phone number of 919-514-3320, which would be a Zillow-generated phone number or a Google Voice number.
Properties like the ones owned and manged by American Homes 4 Rent (among countless others) are idea for such a scam since they can be shown without the aid of a real estate agent. AH4R issues a one-time code that can be requested again and again once the person has provided sufficient information. Other property managers (one here in Charlotte as an example) will hand over the keys to any of their properties provided you pick it up in person at their office and they photocopy your drivers license. It wouldn’t be too hard to take that key to a hardware store, get a copy made and you’re in.
With the for sale by owner listing on Zillow, the goal really isn’t to sell the property. The scammer, acting as the owner, can negotiate a due diligence fee (which is paid to the Seller at the time of an accepted contract) and they are gone before anyone has caught on.
So how can you protect yourself? For starters, all real estate is Buyer Beware – even when working with an agent. Always verify the information via the public records to ensure that the owner is actually the owner or has the ability to sell. It is legal in North Carolina to list a property for sale that the Seller does not yet actually own. However, there need to be sufficient checks put in place to ensure that the Seller has the ability to sell the property and pass clear title.
Finally, sites like Zillow have become the new target for many of these scams since listings on there are viewed as being legitimate. However, anyone can post and authenticate themselves as the owner of the property through a few simple steps. Therefore, ask questions, do research, and always verify.