Top 10 Real Estate Scams of 2024 in New Jersey: What Buyers and Sellers Need to Know
The New Jersey real estate market in 2024 presents exciting opportunities for both buyers and sellers—but with increased interest comes an uptick in scams. Whether you’re looking to purchase your first home, sell a property, or invest in real estate, being aware of the common frauds in the market is essential. To help you navigate this landscape, we’ve compiled the Top 10 Real Estate Scams of 2024—with a split focus on five scams that target buyers and five scams that prey on sellers.
Top 5 Real Estate Scams Targeting Buyers in 2024
1. Timeshare Resale Scam (Paying ‘Taxes’ Before Closing)
One of the most insidious scams affecting real estate buyers in 2024 involves timeshare resales. In this scam, buyers are led to believe that they’re purchasing a sought-after timeshare property at a discounted price. However, the seller demands that the buyer pay “government taxes” or “processing fees” upfront before closing the deal. Once the payment is made, the scammer vanishes, and the buyer is left with no timeshare and no way to recover the money.
How to Protect Yourself:
Always be cautious when asked to make payments before closing, especially for taxes or fees that sound too vague to be legitimate. Legitimate timeshare companies will never ask for upfront payments for taxes or processing fees. Do your due diligence, and consider hiring an attorney or real estate professional to review the contract.
2. Phantom Rental Listings
With the popularity of online platforms like Zillow and Craigslist, many buyers are falling victim to phantom rental listings. Scammers post fake listings for desirable rental properties, often with enticing prices and pictures. When a buyer shows interest, they’re asked for a deposit or first month’s rent to secure the unit, only to find out the property is either already rented, nonexistent, or the scammer disappears once the payment is made.
How to Protect Yourself:
If a rental price seems too good to be true, it probably is. Always visit the property in person and meet the landlord or agent before signing any contracts or making payments. Use trusted rental platforms that verify the legitimacy of listings.
3. Wire Transfer Fraud (Fake Closing Agents)
Wire transfer fraud is an ongoing problem in the real estate market, and buyers are frequently targeted. In this scam, the buyer receives fraudulent wire transfer instructions, often from a “hacked” email account of a trusted real estate agent, attorney, or title company. They are instructed to send their closing funds to an account controlled by the scammer, only to discover after the transaction that the funds have been stolen.
How to Protect Yourself:
Always verify wire instructions with a trusted source by calling the real estate agent or title company directly (never use contact information provided in an email). When possible, meet in person to confirm details before transferring any money.
4. Fake Foreclosure Listings
In this scam, buyers are led to believe they are purchasing a foreclosed property at a significant discount. Fraudsters often post fake foreclosure listings or advertise “exclusive” opportunities to buy properties that don’t exist or are not actually in foreclosure. Buyers are pressured into making quick decisions and sending money before fully researching the property.
How to Protect Yourself:
Research any foreclosure listings thoroughly through legitimate channels like county records or trusted real estate agents. Never make payments without verifying the property’s legal status.
5. Bait-and-Switch Schemes
A bait-and-switch scam occurs when buyers are shown an appealing property that is priced well below market value. Once the buyer expresses interest, they are told that the property is no longer available, but an alternative, more expensive property is offered instead. The scammer often pressures the buyer into making a quick decision.
How to Protect Yourself:
If a deal seems too good to be true, walk away. Always insist on viewing the actual property and be wary of high-pressure sales tactics. If the seller can’t provide full details about the property, or if the listing vanishes mysteriously, consider it a red flag.
Top 5 Real Estate Scams Targeting Sellers in 2024
1. Timeshare Resale Scam (Seller Paying ‘Taxes’ Before Closing)
Sellers of timeshare properties are also at risk of being scammed in 2024. In this variation of the timeshare resale scam, the seller is contacted by an agent or company claiming they have a buyer lined up for the property. However, the scammer demands that the seller pay taxes or fees upfront, often claiming these are required by the government or to secure the closing. Once the fee is paid, the buyer disappears, and the seller is left with nothing.
How to Protect Yourself:
Never pay fees upfront for a timeshare resale. Legitimate companies only charge fees after the sale closes. Research any company thoroughly, and consult with a real estate attorney before proceeding with any timeshare sale.
2. Fake Buyer Scams (Wire Transfer Fraud)
Sellers, too, are vulnerable to wire transfer fraud. In this scam, the seller believes they have a legitimate buyer, but during the closing process, they are contacted by a fraudster posing as the buyer’s agent or a title company. The seller is instructed to wire funds for closing costs or to “secure” the sale. When the funds are transferred, the scammer vanishes, leaving the seller at a significant financial loss.
How to Protect Yourself:
Always verify wire instructions with the buyer’s agent or title company using direct phone numbers or in person. Be cautious of any last-minute requests to wire funds or send money via non-traditional methods.
3. The Overpayment Scam
In this scam, a buyer offers more than the asking price for the property and sends the seller a check for the inflated amount. The buyer then claims the overpayment was an accident and asks for the difference to be refunded before the check clears. Once the seller sends the refund, they later find out the original check was fraudulent, leaving them out of pocket.
How to Protect Yourself:
Always wait for a check to clear before issuing any refunds, especially if the buyer is offering more than the agreed-upon price. Only accept certified checks or other secure forms of payment that guarantee funds.
4. Fake Offers and Lowball Bids
In this scam, fraudsters pretend to be interested in buying a property but make an unrealistically low offer. After the seller agrees to the terms, the scammer disappears or attempts to pressure the seller into accepting unfavorable terms. This is often a tactic used to gauge how desperate a seller is or to create an emotional connection before further manipulation.
How to Protect Yourself:
If an offer feels too low or the buyer seems to be rushing you to make a decision, take a step back. Work with a licensed real estate agent to help evaluate legitimate offers and recognize red flags.
5. Fake Closing Agents and Title Fraud
Sellers can fall victim to scams involving fake closing agents or title fraud. In this scam, a seller might receive communication from someone posing as a title company or closing agent. They’re told that the closing process will be handled remotely, often with instructions to send funds or documents to a fake account. Once the seller completes the transaction, the scammer disappears, and the sale never actually occurs.
How to Protect Yourself:
Always work with a reputable, licensed title company and closing agent. Verify their credentials before transferring any funds or documents. If anything about the closing process feels off, trust your instincts and consult a professional.
Key Takeaways
In conclusion, whether you’re a buyer or a seller, you can be vulnerable to these top scammer tactics. It is important to do further research beyond your main contact point and always make an attempt to call or meet with the company you are working with in person. This is where an agent can really benefit you as they are the best suited to ensure that you are protected and working with legitimate clients.
Furthermore be aware of buyers or sellers pressure to buy/sell fast. Never make a hasty decision without being fully educated about the property you are interested in. Lastly and most importantly, although it may be tempting, offers that look too good to be true are never the right move. It can be easy to buy into a scam like this however, just know that it is never what it seems to be.
By being aware of these scams, you’ll be able to protect yourself and feel confident about buying or selling in the future.
