Lansing, MI - Michigan Attorney General Dana Nessel has issued a new consumer alert, Real Estate Scams – How to Avoid Being Taken in by Fake Listings to educate renters and homebuyers on how to avoid property scams, spurred by recent reports.
Fraudulent real estate listings often advertise properties that don't exist, are not for sale or rent, or are not what they appear to be.
One online posting on real estate marketplace Zillow listed a Florida house priced at less than three percent of its actual worth with the listing “agent” indicating it would only deal with first-time homebuyers without representation. The lister also required a $4,500 deposit before the home could be viewed. Another home, also in Florida, was used for four different scams using the Facebook Marketplace to lure consumers looking to buy as well as rent the same home. These details showcase warning signs that should tell potential buyers and renters that the listings are fraudulent.
“Purchasing a home is often the single largest expense a consumer will make in their lifetime, and entering a new lease on a rental home likewise represents a huge financial commitment,” said Nessel. “Sadly, when the sums reach such heights, fraudsters and scammers are drawn to these markets. Prospective homebuyers and renters can avoid falling victim to these scams with moderate vigilance and reasonable precautions, and a healthy skepticism of any listings that appear too good to be true.”
Nessel’s alert cites Zillow's advice on the red flags homebuyers should look out for:
- Requests to wire funds – The majority of frauds ask for money to be wired using Western Union or MoneyGram, or to be sent using payment apps like Venmo or Cash App. Never send or accept money from someone you haven't met in person.
- Long-distance solicitations – Many scams are perpetrated by people located overseas who claim to be interested in buying or renting a house in the States.
- Requests for verification codes – Avoid sharing any verification codes received via text, as scammers can use these to hijack your account, enabling further scams.
- Requests for personal or financial information – Do not provide your bank account number or Social Security Number to anyone you have not verified.
- Grammar/spelling errors and sob stories – Watch out for spelling and grammar mistakes and stories of hardships, which are typical indicators of fraud.
The red flags for rental listing scams are similar to those that exist in homebuying fraud schemes. According to the Federal Trade Commission, using the following strategies can help you avoid being a victim of a rental scam:
- Conduct an online search – Look for the name of the owner or rental company using the words “complaint,” “review,” or “scam” to see what others have said about their experiences.
- Examine the price of similar units – Is the price lower than most comparable units in the area? This could be a sign of a scam.
- Look carefully at the property before you sign or pay – This can be done virtually or in person. Ask the agent for a business card issued by the owner or manager to check the agent’s ID. Make sure it matches the company’s records.
- Never provide personal or financial information – If someone contacts you and claims to be working with the owner or rental company, don’t provide personal information. Use the contact information you have and contact the owner or property management company first.
- Don’t pay with cash – If anyone requires you to pay with cash (or wire transfers, money cards, or cryptocurrency), it’s a scam. These payment methods are the same as cash. Once you send the funds, it is unlikely you can get them back.
By raising awareness, enforcing regulations, and providing resources to consumers, AG Nessel is continuing her department’s commitment to protecting Michigan residents from falling victim to fraudulent schemes and ensuring the dream of homeownership and secure rental housing remains within reach for all.
If you believe you have been the victim of a rental scam or real estate scam, report it to:
- your local law enforcement agency;
- the FTC; and
- the website where the ad was posted.
See: Real Estate Scams – How to Avoid Being Taken in by Fake Listings
You can also file a complaint with the Department of Attorney General’s Consumer Protection Team:
Consumer Protection Team
P.O. Box 30213
Lansing, MI 48909
517-335-7599
Fax: 517-241-3771
Toll-free: 877-765-8388
Online complaint form