Heed warning signs of real estate scams

As housing recovers and technology evolves, real estate scams have not decreased.

Despite government initiatives on both and federal and state levels, they’ve flourished into more elaborate cons. Homeowners have been scammed out of an average of $4,000 to $5,000 from scams, according to NeighborhoodWorks America, the nonprofit organization behind the Loan Modification Alert campaign.

Forbes recently highlighted three of the most common real estate scams today:

1. Rental scams: Scammers illegally pull online listing information from a home for sale and re-post it as a rental on another site, such as Craigslist. They’ll often ask for money upfront, in the form of a security deposit or broker fee, from prospective tenants. Scammers often advertise the home at a low price and collect application fees from several prospective tenants in order to hold the property for them.

Warning signs: Be cautious of wiring money or paying any upfront fee before you’ve met the agent or signed the contract. Also, be skeptical if they can’t show you the property when you ask.

2. Loan modification scams: Scammers may offer “fake foreclosure counseling, phony forensic loan auditing, nonexistent mass rejoinder lawsuits, bait-and-switch ploys, leaseback programs, and fraudulent ‘government’ modification programs,” Forbes notes.

Warning signs: Be skeptical if anyone asks for money for foreclosure counseling. Foreclosure counseling is free from agencies like the U.S. Department of Housing and Urban Development. Also, always contact your lender directly to work through a modification process. Don’t allow someone to do that on your behalf.

3. Workshop scams: An investment guru will host a get-rich-quick real estate investing seminar and have you sign up for a course that is free or low-cost. The investor may then give you actual properties to invest in if you offer up thousands of dollars in advance. They make bold promises that you’ll become a millionaire, but then nothing ever happens. Also, a form you may have signed initially to take the class may prevent you from taking legal action against the instructor to recoup your money.

Warning signs: While not every workshop instructor is a scammer, be sure to check out the program thoroughly before signing up. Check the company’s rating with the Better Business Bureau (BBB). Also, check if it’s linked to a reputable industry association.