Fake real estate “cloud companies”
The expression “Don’t believe everything you see online” has never been more urgent, especially when you consider this latest web scam (illustration by naishh via Flickr).
The Tennessee Department of Commerce & Insurance (TDCI) and the Tennessee Real Estate Commission alerted me to something pretty sinister. It involves what the TDCI described as fake “cloud-based companies” posting properties for sale online.
“While the properties might be real, the companies are not,” said Kevin Walters, TDCI’s communications director. “In actuality, scammers have created duplicates of legitimate websites and are advertising property they do not have permission to sell. Some unscrupulous individuals even steal licensees’ identities in order to portray themselves as a licensed agent, when in fact they are not. The scammers can go so far as to accept a down payment for the advertised property and then leave the consumer with nowhere to go and an empty bank account.”
Walters said that down payment the impostors demand upfront — before even showing the property and without a single service rendered — is what gives this scam away. He said the scammers will sometimes couch that payment as some sort of fee or commission.
“Requests for upfront money are red flags that should set off alarm bells,” said Crye-Leike real estate agent Lisa Cannon, your exclusive #WiseChoice for a realtor. “No reputable real estate company or agent will ever ask you to pay money upfront for fees prior to viewing a home. Proceed with caution, ask lots of questions and verify the company and the agent at verify.tn.gov to ensure they are properly licensed through the Tennessee Real Estate Commission in order to protect yourself.”
“We urge consumers to always ask questions about the deals they see on the internet,” said TDCI Commissioner Julie Mix McPeak. “Be wary of paying fees for property you have not seen in person or before verifying that the agent you’ve contacted is legitimate.”
More suggestions from TDCI:
- Check with your state’s consumer protection division and real estate commission to ensure both the company and the individual agent are properly licensed.
- Confirm the city of both the company and the agent with those agencies. If the locations do not match, alert those agencies.
- Proceed with caution if the company is asking for money up front. Never give money to someone you don’t know or have any information about other than how they portray themselves on the internet.
- Be sure to confirm the company’s exact location before proceeding with business negotiations. Pay special attention to the suite number or floor. Many fraudulent companies list well-known business addresses, but are not actually associated with the building.
- If you are wary about the location listed, search for the address on the internet. Look for a street view of the location to confirm that business name is on the sign or the building address matches the one provided. If you’re still doubtful, visit the verified address of the legitimate company.
“Real estate agents typically receive compensation at the close of a transaction, not at the beginning, and buyers do not typically pay for a realtor’s service — realtors are paid a commission from the seller,” Cannon said. “Our duties are to work with buyers, showing them homes and properties while offering guidance and advice throughout the entire process from beginning to end.”
Always trust and verify an online property listing and the real estate professional who’s listing it. Have your head on straight in a real estate transaction…instead of your head in the cloud.
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