Home Buying Guide – Beware of Dirty Tricks When Buying Your Dream Home

Real estate frauds and dirty tricks are the realities of a burgeoning real estate market. Everyone must be forewarned of the dark forces that lurk behind those great and one-of-kind real estate deals. Suffice it to say, anyone who intends to join in the frenzied activities in real estate markets have the responsibility to fend off attempts of fraud and deception. You have to remember that booming real estate markets does not only result to skyrocketing home prices but also higher chances of real estate fraud.

This is a major concern that is being raised by interest groups and stakeholders in real estate markets including law enforcement agencies, mortgage firms and insurance companies.

Real estate experts and seasoned investors emphasize the need for home buyers and sellers not to lower their guard with the high incidence of fraud and deception amid the booming conditions in real estate markets. Vigilance is a must for those who are involved in any form of deal in the real estate market. But then again, frauds and dirty tricks are not the exclusive domain of growing and vibrant real estate markets. This means that the dirty tricks and underhanded techniques are not only stoked by increasing home prices. While this view might raise disparate positions among stakeholders and major players in the real estate industry, it is still a wise decision to remain vigilant regardless of the prevailing condition in the real estate market.

In fact, you can still become unknowing victim of scammers and shady characters years after your purchase of your home. In truth and in fact, these scammers attack when you least expect it. One of the major challenges for us is the apparent lack of data and statistics that would give us a clear picture of the extent of mortgage fraud in Canada.

On the other hand, US real estate industry experts estimate that total losses to fraud are within the range of $4 billion to $6 billion annually. One strong proof that real estate fraud is a major concern is the existence of 42 working task groups of the US Federal Bureau of Investigation whose main function is to go after individuals and groups engaged in real estate frauds and scams.

Based on US experience, industry experts in Canada agree that losses directly attributable to real estate fraud can reach millions of dollars on a conservative estimate. What complicates the situation is the apparent lack or limited public attention on this real estate menace. Banks and other financial institutions fear of a major backlash as a result of the erosion of confidence of consumers once the real score is brought to the fore. In short, banks and mortgage companies choose to absorb their losses and keep these unfortunate events under wraps.

If you want evidence that proves the extent of the problem, we can get a good measure, albeit indirectly, by considering the number of lawyers who are under investigation for abetting or colluding in the commission of real estate fraud. In Ontario alone, about 140 lawyers are subject of complaints for alleged real estate frauds and malpractice.

What are the potential targets of real estate fraudsters? Criminals are very imaginative and innovative when it comes to deception. Their main motivation is to earn money at the expense of others, and they will do whatever it takes to hit the financial jackpot. Make no mistake about it, if you have an average home price which is greater than $450,000 and a mortgage which is about $400,000, a person with a criminal mind is not far behind.