Ah, the signs of spring – chirping birds, budding flowers, and rental scams.
Spring traditionally is a busy time for residential real estate. Sellers spruce up their homes and yards, while buyers take advantage of open houses and weigh their options of renting versus buying. Unfortunately, scammers know potential buyers and renters are on the scene more so than in recent months and seek to take advantage.
Rental schemes are not new, and this time of year seems to be ripe with them. Considering a recent experience with one of my listings, I want to refresh our memories on how rental schemes work and offer ways to avoid being a victim.
On a Friday, I secured a listing agreement to sell the home of a friend’s deceased parents. That evening, I entered the property information into the Association’s multiple listing service. On Saturday morning, my phone began ringing from callers who had seen a “for rent” ad on Craigslist for $500 per month. The callers indicated they had driven by the home and were interested in seeing the inside before providing a money order for the rental deposit. Based on my questions, I learned the rental ad used an email address containing the name of the deceased owner. Through emails, the potential renter was told the “owner” was a missionary living overseas and wanted to rent the house while he was out of the country. The potential renters were instructed by the “owner” to contact me for a showing, and if they liked the home, to remit the rental deposit via money order to the “owner.”
Fortunately in this case, I was able to intervene and prevent the unsuspecting renter from being duped. However in similar cases, I’ve learned that potential renters submit to a credit check, are denied, and told the property has been rented to someone else. They later learn they are the victim of identity theft based on the information they provided for the credit check. In other scenarios, potential tenants remit a deposit and later are told the property has been rented to someone else. The potential tenant is unable to recoup the deposit, as the “landlord” who took their deposit cannot be located.
So what are your options when you suspect similar activity? Our immediate past president Mark Blazek shared these tips with you last April, and they merit repeating:
1. Report the fraudulent activity to the authorities. The FBI website has additional information on such scams (www.fbi.gov/news/stories/2009/july/housingscam_072909). Also, you can file a complaint with the FBI at www.ic3.gov/default.aspx. While you may not get an immediate resolution, your complaint might be the missing puzzle piece the authorities need to stop such fraudulent behavior.
2. Buyers and renters: Be cautious when completing credit checks and rental applications. Do your homework to research the individual or company that has the property advertised. Google the property address to see if your search shows that the property is listed with more than one entity. Be suspicious of advertising that does not include a property address, asks for monies up front, or that simply sounds “too good to be true.”
3. Sellers and listing agents: Sign-up for Google Alerts at www.google.com/alerts and get an email anytime the property’s address is published on a website. Not only does this show a seller the tremendous online exposure their home is getting, but it also helps the seller and the REALTOR know immediately if the property is being advertised falsely. Also, it’s good idea for sellers and REALTORS periodically to review the primary rental property sites to ensure a property isn’t being advertised fraudulently. Popular rental sites include www.rentals.com, www.rentalhouses.com, and www.craigslist.com, some of which have consumer alerts regarding recent scams.
4. Contact the website owner(s) and use every possible method (e.g. registered mail, email, and telephone) to make it clear that the property is being advertised without permission and that the advertisement contains inaccurate information. Demand that the advertising immediately be removed. After five to seven days, check the site(s) to see if the advertisement has been removed. Follow-up with the site owners and stay on top of them until the fraudulent advertising is removed.
5. Keep a paper trail of all your communications to track your proactive attempts to get the situation resolved. This suggestion is especially important for REALTORS, should you ever have to defend yourself against an alleged violation of the Code of Ethics, which requires REALTORS to be honest and truthful in real estate communications and to present a true picture in advertising.
Spring traditionally is the Greater Chattanooga market’s prime selling and buying season. Should the unexpected happen, I hope that some of the above suggestions can point you in the right direction, or better yet, prepare you to avoid a potentially bad situation.
The Greater Chattanooga Association of REALTORS, a regional organization with more than 1,400 members, is one of more than 1,800 local boards and associations of REALTORS nationwide that comprise the National Association of REALTORS. The Greater Chattanooga Association of REALTORS services Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. For more information, visit www.gcar.net.