Most common real estate scams and how to stay safe

Real estate scams are leaving homebuyers without a deposit and renters without a home, but there are ways to keep your money safe. Find out how to spot the red flags.

It seems like scammers are behind every transaction, just waiting to pounce.

It seems whenever there is money to be made there are scammers waiting to pounce.

According to the ACCC’s Scamwatch, Australians lost more than $318m to scammers last year and when it comes to real estate scams, buyers, sellers and renters are all at risk. But by keeping up to date with the latest scams and knowing what to look out for, you can minimise the threat and keep your money as safe as possible.

PAYMENT REDIRECTION SCAMS

Ray White Group head of information security Jacob Downs says payment redirection scams are one of the biggest ways consumers are getting fleeced in the property market. This is where a scammer will impersonate a real estate agent in order to convince the unsuspecting client to deposit funds into a different bank account.

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Payment redirection scams are one of the most common ways buyers are getting fleeced.

“They will create a very similar email address and start emailing the client pretending to be the agent,” Downs says. “They will then provide updated banking details, trying to get the client to deposit funds into the scammer’s account.

“This has also become common in the rental market – with scammers imitating offices and trying to redirect rental payments into scam accounts. In some cases, we are able to notify the banks early to get scam accounts shutdown. But there are new scammers and scams coming out daily – they are even sending these messages via post and not email.”

REIA president and CEO of Laing+Simmons Leanne Pilkington says it is crucial to pick up the phone and speak with the real estate agent before transferring funds if you have received a payment request with new account details.

“Buyers can actually lose their deposit,” she says. “It’s phenomenal how easily it can happen.”

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Real Estate Institute of Australia president Leanne Pilkington. Picture: Supplied

FALSE LISTING SCAMS

Another common scam operating in the market at the moment is when fraudsters use the photos and information from a legitimate rental listing and create a fake private listing on a consumer trading site, says principal of The Rental Specialists Jo Natoli.

Posing as the landlord of the property, they give excuses about not being able to run inspections while offering deals that seem too good to be true.

“Pay us a deposit and the place is yours – no reference checks,” Natoli says of the false promises made by the scammers.

“Then when it comes time to collect the keys, there are no keys – there are no owners,” she says.

While it may defy logic to put down money for a property you can’t physically walk through, people feeling vulnerable because of the rental crisis have found themselves easy targets for such scammers.

“If you have got kids and you are about to become homeless, you may be tempted to take the risk,” she says.

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Ray White Group head of information technology Jacob Downs. Picture: Ray White/ Attila Csaszar

WHEN YOUR AGENT GETS HACKED

Real estate agents also fall victim to hackers and can have their account security compromised in a number of ways.

“We had a situation where one of our offices, their trust account was open on their desk, they were doing some work and then all of a sudden they saw money just coming out of the account and they weren’t the ones taking it out,” Pilkington says. “They ended up losing a few hundred thousand dollars and there was nothing the bank could do about it.”

When an agent’s trust account is hacked the agent is responsible for replacing the funds, she says – but insurance doesn’t always cover this. There is also a consumer fund through the Department of Fair Trading that is used to help reimburse the client however there are certain criteria that must be met.

Sometimes agencies can get hacked and it is outside of your control.

RED FLAGS

Pilkington says if you are not dealing with an agent and you are being rushed to pay a deposit that should serve as a warning sign.

Natoli says any refusal to conduct an inspection is a major red flag – as is asking for a deposit before offering an inspection.

“A request to change payment details is always a red flag,” Downs says. “If dealing over email – is the email address from the company I am dealing with, or from a generic gmail account? Always double check that the person you are dealing with is legitimate – real estate agents live on their phones – take advantage of that and call to verify before transferring money.”

TIPS TO KEEP YOUR MONEY SAFE

There are several things you can do to keep your money safe online and over the phone. Check out www.scamwatch.gov.au to find out more. In the case of real estate transactions, here are some important things to remember.

*Treat any change of account request with caution – Check the sender’s email address carefully and avoid replying to the email. Instead call the agent directly and ask them for confirmation

*Avoid clicking links – If you do receive a suspicious email, avoid clicking on links that could take you to unsecured websites where you are tricked into entering sensitive information

*Choose secure payment platforms – Many agencies offer BPAY or DEFT for making rental payments or PEXA for buying and selling rather than transferring funds into a bank account

*Be careful of private rentals – If renting privately ask for as much documentation from the landlord as possible regarding the acceptance of your application. Make sure the owner is registered with Bonds Online

*Contact your bank – If you think you have been scammed, contact your bank straight away and follow the instructions given

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Originally published as Most common real estate scams and how to stay safe