As criminals have become adept at developing scams in today’s digitally-connected world, including all of the services associated with real estate, the importance of working with a professional buying or selling real estate in Hawaii has never been more important. You should always feel secure knowing you are working with trustworthy service providers, and we always aim to make that the case for you.
Being the victim of a real estate scam is not something anyone wants to happen, especially with their real estate transactions with so much money on the line as well as perhaps 50 years of family memories.
We’ll cover four of these areas to help you spot a scam and provide some tips for your protection.
Wire Transfer Instructions
Stop before you click that link! Escrow funds are a prime and easy target for scammers. If you are contacted to wire any money, especially if there is a change to the original instructions, you should immediately check your original paperwork to ensure the contact information matches.
There’s no harm in reaching out to your lender or escrow officer to confirm the instructions you’ve received are legitimate and not actually a scam; in fact, make it a habit to call them upon each and every change. Then, after you’ve transferred your funds, reach out to the settlement agent to confirm they’ve actually been received. Don’t take the risk of sending in $100,000 or more to Honolulu when instead they’ve been sent to the Caymans.
Refinancing an Existing Mortgage
Predatory lenders will try to persuade homeowners to refinance over and over, known as loan flipping. What often happens is that borrowers end up with no equity left to leverage and high-interest loans they never truly understood. It’s usually not a good plan to finance a mortgage within a close time range of another – spread them out and take them to understand all the terms and conditions.
Sadly, elderly borrowers are a favorite target of this type of scam artist. Lenders are required to provide closing disclosures as well as loan estimates, providing any third-party costs and all fees. As a safety gap, any senior conducting business should routinely have transactions of a significant nature reviewed by a trusted family member or friend, most especially when dealing with financing. If you’re watching over someone in their golden years, ensure they come to you with any concerns or changes they’re considering. If you don’t understand it yourself, no worries – schedule a time for everyone to visit a broker or even an attorney; it’s that important.
Capitalizing on Your Foreclosure
Facing foreclosure is extremely stressful and can leave homeowners desperate for a solution. Regrettably, this also creates an opportunity for nefarious scam peddlers. They might represent themselves as government agencies and charge massive upfront fees for empty promises, leaving you in an even worse financial situation than you were beforehand; we’ve spoken to people in Hawaii who have lost thousands to people who never cared one lick about them.
Don’t speak with anyone who says you shouldn’t speak to an attorney or to your lender – these are major red flags. Should you find yourself facing foreclosure, talk to your lender and be open about your difficulties. Many are willing to work out a solution with modifications, forbearance, or some other arrangement. You never know if you don’t ask.
Speak to a HUD accredited housing counselor to provide you options as well, they will even attend third party telephone calls with your lender to assist you.
Naturally, you can also contact us to explore your options for avoiding a foreclosure; we’ll dig into everything and see if we can help.
Renting a Home
Should you decide that homeownership doesn’t make much sense right now and you’d rather find a rental home instead, there are a few steps you can take to protect yourself from a scam.
Lookup the owner’s info in the county records. If someone is acting as a representative of the owner, contact the owner and speak or meet with them personally, confirming you are actually dealing with the right person. The owner might not have any idea what you’re talking about – it happens!
If they claim to be a real estate professional, ask to see their license and take a picture of it. All licenses can be confirmed on the state division of real estate licensing website. Anyone who refuses to let you see their license isn’t someone you should be renting a home from.
Avoid the internet or over the phone transactions. Meet in person to sign documents and make payments whenever possible! Use a check for a record and receipt of the transaction as well. If it ever goes to court, canceled checks can serve as powerful evidence.
The internet has dramatically changed the real estate industry and will continue to do so, but it also gives crooks new ways to prey on good people. Inexperienced renters are often their favored victims, although they’ll gladly rob anyone of tens of thousands of dollars.
Sometimes they’ll post photos of houses that aren’t even available and demand upfront fees just to make a viewing appointment. Never pay anything upfront before you know everything about the rental you are interested in here in Hawaii. Reach out to those you know and trust for recommendations if something doesn’t sound right to you!
It’s a new world we live in, but as always, it’s full of good (lots of them!) and not so good people (not as many, but they’re there!). If you need help, please reach out to us and we’ll do what we can to be of service. Aloha!