‘This scam is the rental market equivalent of catfishing’
The attorney general’s office calls for “inspecting an apartment carefully before signing a lease or paying a deposit.’’
In December, a Quincy real estate broker pleaded guilty to two counts of wire fraud and two counts of aggravated identity theft. The state says he stole nearly $2 million in real estate deposits and through scams such as marketing properties that weren’t for sale, cashing more than 60 checks between 2017 and April 2020.
To avoid schemes like this, it’s important for consumers to recognize the signs of real estate fraud.
It can take many forms.
Rachel Foy, broker/owner of Hillman Homes in Newton, said one of the most common scams home shoppers face is a faux listing: when scammers use the information from a legitimate listing and pose as the real estate agent on Craigslist or another online platform, tricking people into sending them down payments or security deposits.
“This scam is the rental market equivalent of catfishing, and while it’s not new, we want the public to be aware of the increased risks during the pandemic,’’ Maura Healey, Massachusetts attorney general, said in an online statement in 2020.
Healey’s office told the Globe last week that it has received several such complaints, but despite the shift to virtual tours early on in the pandemic, there has not been an increase in real estate fraud overall even though it is easier for con artists to scam prospective buyers with no face-to-face meetings.
The attorney general’s office calls for “inspecting an apartment carefully before signing a lease or paying a deposit.’’
Another common scam relates to phishing and wire fraud. Scammers intercept e-mails intended for buyers or renters and tell them to wire the money elsewhere or through a different method, often citing technology issues, Foy said.
Jilliene Helman, CEO of RealtyMogul, a crowdfunding investment platform, said that buyers should always verify instructions when wiring money and that those instructions should never come via e-mail. Helman said her company uses a secure website and phone calls to ensure that the money is going to the right place.
On its website, the attorney general’s office advises consumers never to “send a wire transfer, cashier’s check, or funds transfer to someone you’ve only met online’’ and not to “disclose your Social Security number or PayPal information to someone you’ve only met online.’’
Foy agreed: “Never send money or sign a contract having [had] your whole conversation
over text or e-mail. You really want to make sure … you’re talking to the right person.’’
There are other red flags buyers and renters should be aware of before making payments to anyone, the attorney general’s office advises, including poorly written ads and requests for cash payments, which aren’t traceable.
Helman said renters and buyers also should be extremely careful about unrealistic prices and great deals. “The market’s really hot right now, and it’s hard to find a true deal in a market like this,’’ she said. “So, if you think you’re getting a deal that’s too good to be true, it probably is.’’
She also warned against sellers who pressure buyers to rush into a transaction. It can be concerning “if someone’s pressuring you to do something and you don’t have the ability to read the documents, and slow down, and make sure that the T’s are crossed and the I’s are dotted,’’ she said.
Home shoppers should also be on the lookout for unscrupulous agents, including those who ask clients to pay them upfront to work with them. “Many people don’t understand how agents get paid, but when it comes to the sale of a home, the seller takes care of both the selling agent’s fee and the buyer’s agent’s fee,’’ said Seema Layne, a partner on the Kaufman Realty Team at Keller Williams Boston Southwest.
Layne recommends using Mass.gov to verify an agent’s credentials and license. This can reduce the risk to the buyer or renter.
“But again, people can pretend online to be somebody else,’’ Foy said, “so, you can ask for the name and license, and it might line up, but if that’s somebody pretending to be that somebody, you still want to make sure … you’re actually talking to the right person.’’
“One of the things I like to do is my own callback,’’ Helman said. “If they call me at the property management firm, [I’ll] say, ‘Hey I’ll call you right back.’ I look at the number on Google for the property manager … and make sure that it’s the same company.’’
First-time home buyers and young students looking for their first apartments are especially vulnerable, Layne said, so even though it isn’t required, it’s helpful to seek legal counsel. Talking to real estate attorneys and reviewing the documents of a purchase with them is money well-spent, Layne said.
If you believe you are being scammed, or you are a listing agent who suspects fraud, the state urges you to report it (www.mass.gov/how-to/how-to-report-suspected-fraud-waste-or-abuse-to-the-oigreport fraud).
“Ensuring that our residents have access to safe and reliable housing is a priority that has always guided the work we do in my office. Whether that means advising consumers about how to protect themselves against apartment leasing scams, or taking action against fraudsters who prey on individuals looking for a home to raise their families, we will continue to advocate for our residents and make sure they are not being taken advantage of or left without housing,’’ Healey’s office said in a statement.
Dylan Dhindsa can be reached at [email protected]. Follow him on Twitter @DylDhi. Subscribe to our free real estate newsletter at pages.email.bostonglobe.com/AddressSignUp. Follow us on Twitter @GlobeHomes and Boston.com on Facebook.
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