Two Real Estate Scams You Should Know About

Recently, the Minnesota Department of Commerce issued notices to real estate agents about several scams that are targeting both new and existing homeowners. As a potential homebuyer or an existing homeowner, it is important to be aware of these scams and to know how to protect yourself.

One of the scams involves home warranties, which is a product that a homeowner can purchase to cover certain defects on their house for one or two years, depending on the product. Scammers have recently been contacting homeowners by phone or letter, using the names of legitimate home warranty companies, and claiming that your home warranty has expired or that you need to purchase one. They cite the name of your lender, which they can obtain from the public records, to lend credibility to their claim, and they ask for your bank account or credit card information to process the order. 

To avoid falling victim to this scam, it is important to speak to a real estate professional and verify that the company is legitimate before providing any personal information.

Another common scam involves a letter from a company claiming to have a copy of the homeowner’s deed and requesting payment for a copy. The letter may appear official and look like it is coming from a government agency or a title company. However, homeowners can obtain a free copy by contacting the title company or their real estate agent, so there’s no need to pay for it.

Finally, wire fraud in real estate transactions is an ongoing issue. We talk to our clients about it every time we get to that part of the process where they have to transfer the funds for transactions.

We just wanted to share this public service announcement with you. If you have any questions on the market or any of these consumer protection issues, call or email us anytime.