Scenario 1: A seller lists their home for sale with a Realtor. The property appears in an online ad as being available "for lease." The online ad does not include the property's address but offers additional information following a credit check. A potential tenant submits to the credit check, is denied and told the property has been rented to someone else. Later, the potential tenant discovers they have been the victim of identity theft based on the information they provided for the credit check.
Scenario 2: A seller lists their home for sale with a Realtor. The property appears in an online ad as being available "for lease." The online ad includes a link to a rental application form and requires a deposit. A potential tenant completes the rental application, remits the required deposit and is then told the property has been rented to someone else. When requesting the return/refund of their deposit, the potential tenant is denied. The "landlord" who took the "deposit" cannot be located.
Unfortunately, scams are bound to occur in any industry. And scams such as the ones described above are frustrating and financially detrimental to all involved. Various twists on these scams are happening across the country. And while this is a negative side to an otherwise positive upswing in the Greater Chattanooga real estate market, I wanted to share the following suggestions to assist consumers and Realtors when faced with such a scam.
One option is to report fraudulent activity to the authorities. On the FBI website www.fbi.gov/news/stories/2009/july/housingscam_072909, there is additional information on such scams. Also, you can file a complaint with the FBI at www.ic3.gov/default.aspx. While you may not get an immediate resolution, your complaint may be the missing puzzle piece authorities need to stop such fraudulent behavior.
Aside from filing a formal complaint, potential buyers and tenants should be cautious when completing credit checks and rental applications. Do your homework to research the individual or company that has the property advertised. Google the property's address to see if your search shows that the property is listed with more than one entity. Be suspicious of advertising that does not include a property address, asks for money up front or simply sounds "too good to be true."
When listing a property for sale or lease, sellers and Realtors can sign up for Google Alerts at www.google.com/alerts and get an email anytime the property's address is published on a website. Not only does this show a seller the tremendous online exposure their home is getting, it also helps the seller and the Realtor know immediately if the property is being advertised falsely elsewhere. Also, it is a good idea for sellers and Realtors to periodically review primary rental property sites to ensure that a property is not being advertised fraudulently. Popular rental sites include www.rentals.com, www.rentalhouses.com, and www.craigslist.com, some of which have consumer alerts regarding recent scams.
If you think a property is fraudulently being advertised, contact the website owner(s) and use every possible method (e.g. registered mail, email and telephone) to make it clear that the property is being advertised without permission and that the advertisement contains inaccurate information. Demand that the advertising immediately be removed. After five to seven days, check the site(s) to see if the advertisement has been removed. Follow up with the site owners and stay on top of them until the fraudulent advertising is removed.
Keep a paper trail of all your communications to track your proactive attempts to get the situation resolved. This last suggestion is especially important for Realtors should they ever have to defend themselves against an alleged violation of the Code of Ethics, which requires Realtors to be honest and truthful in real estate communications and to present a true picture in advertising.
I reiterate that there are many positives in the Greater Chattanooga market, as we've touched on in previous articles. With spring traditionally being our market's prime selling and buying season, I encourage everyone to be smart about their home search. Should the unexpected happen, I hope that some of the above suggestions can point you in the right direction, or better yet, prepare you to avoid a potentially bad situation.