How Might You Be Scammed by Real Estate Appraisers?May 26, 2020 6:01 pm Leave your thoughts
Anytime you’re buying or selling property, you need to be on high alert for fraud. While many appraisers, lenders and sellers are on the up-and-up, there are still predatory people out there who hope to take advantage of novices. Some of these scams can be perpetrated by fraudulent appraisers, while others may appear in conjunction with lenders and sellers. Here’s how to spot appraisal or property scams and fraud in Napa County, CA:
- Appraisers “tweaking” the numbers: Appraisers are often hired by lenders who want (or are at least hoping for) certain numbers in the property value assessment. If an appraiser values the property too high or too low, that can affect whether the buyer is able to purchase the property (falsely believing they’ll be able to recover their costs if they sell), or may lead to the lender losing money if they need to foreclose on the property. Alternatively, a much lower buying price could help buyers be able to purchase a property worth more than they could normally afford. To avoid this scam, get your own appraisal. Research your appraiser carefully and ask for references—both their own former clients, as well as independent referrals from property owners in your network.
- Loan flipping: Loan flipping occurs when predatory lenders encourage a property owner to refinance their mortgage repeatedly, which may require them to borrow more money. They can tack on higher fees, eventually making it impossible for the owner to repay the loan. Then the bank may end up foreclosing on the home. To avoid this, make sure that you work only with banks and lenders with whom you are already familiar. Ask plenty of questions about fees, penalties and the necessity of refinancing. If a lender proactively contacts you, without your reaching out and asking for their help, that’s a sign that something is off.
- Escrow fraud: If you’re contacted by a lender or title company asking you to wire escrow funds to them, be wary. Scammers and phishers can spoof contact information—even phone numbers on your caller ID—to make it look like a legitimate company is asking for your escrow funds. Alternatively, they may tell you there’s been a change in where to wire the funds. To protect yourself from this scam, look at the original documents your lender or title company provided, and call them directly to inquire. If the request was legitimate, the company will have records of who contacted you, when and how. Confirm any account numbers and wire instructions with a verified real person first, and ask for all communications in writing whenever possible. Otherwise, you may be wiring hundreds of thousands of dollars—or more—to a scammer with an offshore account.
If you suspect you may be a victim or potential victim of a scam, you can contact the Federal Trade Commission for more guidance. Practice constant vigilance in order to ensure your money and property are protected.
For ethical real estate appraisals and for more information on how to spot appraisal scams in Napa County, CA, call County Appraisals Inc. today.
Categorised in: Real Estate Appraisals
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