It’s hard to believe there are people out there who can look you in the eye and tell a bold face lie – just to get your money or something else they want. But it’s not that uncommon, actually.
According to Harvard psychologist, Dr. Martha Stout, roughly 1 in 25 Americans are sociopaths – and many seem to flock to real estate, where they can find easy prey.
I’ve personally met dozens of these types in the real estate world. I can see it right away now, but not so much when I was new to the business.
Sociopaths can’t really hurt you as an investor if you do your proper due diligence. However, these scam artists usually prey on new investors who don’t know how to do their due diligence. And they tend to be very magnetic and charming, which creates trust that often has people feel they don’t need to do their homework. Sometimes even experienced investors just sign up blindly. Don’t do that!
The Huffington Post wrote an article about the top 11 ways you can know you’re dealing with a sociopath in business or anything personal.
11 Signs Your Real Estate Advisor is a Sociopath
#1 – Having an oversized ego. Megalomaniacs basically.
#2 – Lying and manipulative behavior. If they lie to others, they’re probably lying to you, too.
#3 – Exhibiting a lack of empathy.
#4 – Showing a lack of remorse or shame.
#5 – Staying very calm in scary or dangerous situations.
#6 – Behaving irresponsibly or with extreme impulsivity.
#7 – Having few friends. They don’t really want them or need them.
#8 – Being very charming and friendly because they know it will get them what they want. They are expert con artists and always have a secret agenda. They are masters of disguise. Their main tool to keep them from being discovered is a creation of an outer personality.
#9 – Living the pleasure principle. IF it feels good, they will do it – especially if they can avoid consequences. They live in the fast lane, seeking stimulation, excitement and pleasure.
#10 – No regard for society’s rules. They break rules because they believe they don’t apply to them.
#11 – Having intense eyes, with no problem maintaining uninterrupted eye contact. This can seem aggressive or seductive depending on their goal.
The Scamguard website just published its top ten scams of the year and there are a few real-estate related ones to avoid. One is the “Home or Vacation Rental Scam”.
This scam has become more common since the housing meltdown because more people are interested in renting. Scammers might target homes that are advertised for sale or rent on multiple listings or vacation rental sites.
Scamguard says they typically choose homes in more upscale, low-crime areas, and offer them for rent on Craigslist for less than the average amount in that area. They could easily copy photos of the home into their own rental listing.
Of course the people who do this won’t meet with a prospective tenant face-to-face. They will often use internet-based phone calls and text messages that may originate from foreign countries, and ask that payments are sent by non-refundable wire-transfers.
The risk of identity theft is high for the person trying to rent the home. As for the homeowner, it’s never a pleasant scenario to have someone who just paid a lot of money to rent your home, trying to get inside, and then finding out they were scammed.
One way to help avoid this would be to make it look like your home is not completely vacant, or has good security. You could leave a light on, with a timer or have a surveillance camera with a motion sensor so it alerts you as to when someone is snooping around.
Another scam listed by Scamguard is the “Timeshare Resale Scam”. This scam appeals to people who may not have the time to enjoy their timeshare and would like to recoup the money they spent on it. Scammers may tell these people they have the perfect “buyer” or “renter” who can take the timeshare right away. But these scammers also require an upfront fee.
Scamguard says that victims may be given a whole range of reasons for the fee, from the need for an appraisal or marketing analysis, to fees needed for transfer or closing. They may even put whatever reason they are providing into a fake contract.
The advice from Scamguard is to immediately distrust anyone asking you for upfront fees. Instead, Scamguard suggests listing your timeshare for free or for very little money at websites like Redweek.com, TimeshareMarketplace.com, or Tug2.net.
Technology guru, Kim Komando, lists a few other Craigslist scams that show up in real estate listings. She says these scams are typically for property rentals, but they also affect private home sales.
The first one she calls “The Credit Report Scheme”. This is related to phishing where there’s a link authorizing a credit check that allegedly takes you to an official site. And in this case, it does, with a pass through the scammers server where a referral ID is tacked on to the request. The credit agency then receives the request, the victim pays a fee, and the scammer receives a fee for the referral.
Of course, the listing is also a fake, so the victim is left dangling without a response after paying for a credit check. Kim Komando doesn’t mention the possibility of ID theft, but it seems to me that the victim is also left vulnerable to that.
She also warns about “Cloned Listings”. This is the same as the “Home or Vacation Rental Scam” listed by Scamguard. Komando described one scenario, saying the homeowner who was selling the home started noticing all these people coming to his house and looking around. He said that some were coming on to his porch and peering into his windows. That must’ve been unsettling!
The third scam Komando warns about is “The Realtor Service Company” scam. She says in this scam, a Craigslist user is asked to pay an upfront fee for membership into a listing service that doesn’t exist. The buyer is promised access to listings that haven’t made it yet to the MLS, including pre-foreclosures and homes being auctioned off. In reality, the listings sent to the Craigslist user are all a fake.
The big red flag in most of these scams is the request for an “upfront” payment. Don’t do it. And of course, if it sounds like it’s too good to be true, it probably is.
Komando says to protect yourself, if you find a property on Craigslist that you’d like to check out, copy the address into Google and look at the results. If the property is listed on Craigslist as a rental, but shows up on “for sale” websites – Watch out! You are probably dealing with a scammer.
It’s also a big red flag if you are unable to meet with the owner or a property manager in person or if you are asked to wire money to a property owner who might be “out of the country.” And of course, if you stumble on a scam ad or are victimized, you might want to let the website know and contact local authorities.