Real estate scams in Florida are on the rise.
As fraudsters become bolder and more creative, it is vital to learn about common property scams, even if you do not have any real estate transactions in the pipeline.
You should know how scams work, what to watch out for, and how you can protect yourself and your family.
What Are the Different Types of Real Estate Scams That Happen in Florida?
Florida has been dubbed the Wild West of property scams, and with good reason.
The state has been at the center of many a real estate scandal, including the infamous swampland in Florida scheme of 1925, in which con man Charles Ponzi would pass off and sell swampland as developable property.
In more recent times, Florida real estate law practitioners have increasingly been seeing scams such as:
- Escrow wire fraud
- Rental scams
- Moving scams
Let us explore these in more depth.
3 most common real estate scams in Florida
In the sections below, we will take a closer look at three of the most common property scams in Florida. We will explain the scam, give an example to show how it works, and tell you how to avoid it. And if you have already been a victim of one of these or other real estate scams, get in touch with our team to discuss your options such as Florida real estate mediation or a lawsuit.
Let us plunge right in.
1. The Escrow Wire Fraud Scam
A title or escrow company calls, texts, or emails you with instructions on how and where to wire your escrow funds. On the face of it, you have nothing to worry about. The company’s website looks professional, and the phone numbers and email addresses seem legit.
You follow the instructions and think nothing of it. Until one day, you realize that the funds have not reached their final destination and the purported company has taken off with the money.
This scenario is a classic example of escrow fraud. To trick you into wiring your money, scammers set up fake websites, phone numbers, and email addresses. They appear almost identical to those of the company you are working with. But if you take a closer look, you will often see that one number or letter is off.
Example of the Escrow Wire Fraud Scam in Action
Patricia, a single mom from South Florida, thought she had put down a $63,000 deposit for a condo. As she was unpacking her belongings in what she believed was her new home, her realtor called: The title company had not received the money.
The bank records showed that the funds had been wired, so Patricia showed the wire instructions to her realtor and the title company. To everyone’s surprise, that was not the title company’s account.
How to Avoid the Escrow Wire Fraud Scam
To protect yourself against fraud, be very wary of calls, emails, and texts that give you wiring instructions. Never click on email or text links, sign a Florida real estate promissory note, or send money to third parties before checking the original documents from your lender or title company. Call the phone numbers listed there to confirm the wiring instructions and escrow account number. It is also a good idea to call your settlement agent to verify that the funds have been transferred.
These safety precautions also apply if you are looking to sign a Florida land trust agreement or a Florida real estate LLC operating agreement.
2. The Rental Scam
Home buying scams are not the only ones you should watch out for. You can become the victim of a scam even if you are only looking to rent a property.
Fraudsters often post fake rental ads on social media and websites such as Craigslist. Once they lure you in, they request an upfront payment or a deposit to let you see the property. In reality, they have no connection to the real estate.
A new subset of rental scams uses the end of the COVID-19 eviction moratorium to target vulnerable renters. Fraudsters offer to help renters secure rent money in exchange for an upfront payment or personal information.
Example of the Rental Scam in Action
In 2021, this Florida home rental scammer pretended to own a property, posted a fake listing, and tricked at least two prospective renters into paying deposits via Zelle and ApplePay.
Eventually, the Fellsmere Police Department launched an investigation, but this provided little consolation to the victims who had lost their money.
How to Avoid the Rental Scam
When looking for rentals, never wire deposits, go see the property in person, or negotiate rental terms without doing your due diligence first.
Always ensure that you are dealing with the actual owner and be especially suspicious of anyone who asks for an upfront payment just to let you view the property. You can normally find out who the current property owner is at your local property appraiser’s website. Where possible, avoid transactions via email or on the phone. Ask to meet the owner in person before signing any paperwork or making payments.
You should also verify the identity of anyone claiming to be a real estate agent. Ask them to show you their license and make a copy of it. When you get back home, head over to the Florida Department of Business and Professional Regulations website to confirm the information on the license.
Last but not least, never pay deposits in cash.
3. The Moving Scam
Moving-related scams have also been on the rise over the past few years.
A common scheme involves movers packing up and transporting your belongings and then refusing to release them until you pay an extra high fee.
In an alternative scenario, fraudulent movers give you a low-priced initial quote for the moving job. When they arrive, they ramp up the rate significantly and threaten to abandon the job unless you pay the higher price upfront.
Example of the Moving Scam in Action
On May 9, 2021, movers came and loaded up Bill Orrender’s belongings. He expected the stuff to be delivered in seven days – but his new home was still empty more than three months later.
According to Orrender, he and the broker had locked a price for the job. However, when the contractor showed up at his doorstep, they showed him a different contract – and none of the prices matched what had been agreed.
After Orrender made a partial payment, the movers packed up his things and left. Over 100 days later, the company texted him with a demand for more money as it held his belongings hostage.
How to Avoid the Moving Scam
To start, ask the moving company for its license number and check if any complaints have been filed with the Federal Motor Carrier Safety Administration.
You should also watch out for red flags such as movers refusing to provide a written quote, asking for a large upfront deposit, or only accepting cash payments. Always obtain estimates in writing, make sure they are binding, and never sign blank or incomplete documents. It is also a good idea to get multiple quotes from different companies.
Finally, do not make big payments in advance. While a small deposit is standard, reputable companies do not typically require full payment until the job is done.
Are You Dealing with Any of These Florida Real Estate Scams?
Real estate law is complicated, but the good news is that you do not have to face scammers alone. An experienced lawyer can guide you through the process. We can also assist if you need help with a:
- Florida land trust
- Florida real estate LLC operating agreement
Contact the Cueto Law Group today to speak with an experienced real estate attorney. We will make sure that you get the compensation you deserve.
How to Report Real Estate Scams in Florida
Scam victims are often too embarrassed to file complaints. This not only makes it harder to get adequate compensation but also enables fraudsters to continue targeting unsuspecting homeowners, homebuyers, and renters.
If you suspect that you are a victim of a real estate scam, it is essential to notify the proper authorities right away. You can do so by filing:
- Filing a report with the Federal Trade Commission at ReportFraud.ftc.gov. Once you submit the report, it will be entered into a database shared by local, state, and federal law enforcement services.
- Filing a complaint with the BBB Scam Tracker, which will alert other consumers about potential fraudulent activities.
- Contacting the Florida Consumer Protection Agency.
- Filing a report at IdentityTheft.gov if you are worried about scammers stealing your personal information.
Florida Real Estate Fraud: Final Thoughts
Anyone can become the victim of a property scam. Fortunately, you may be able to cut your losses by hiring a real estate lawyer and reporting the incident as soon as possible.
FAQs on Reality Scams
Here are the answers to three questions about real estate scams in Florida that we often get in our practice:
How Do You Know If a Realtor Is Scamming You?
Watch out for red flags such as prices that seem too good to be true; documentation with deletions or other alterations; a mismatch in the name of the seller on the sales contract and title; excessive commissions, fees, or points; or payments to unknown third parties.
Can You Get Scammed Selling a House?
Yes, you can get scammed selling real estate. A common scam involves fraudsters posing as would-be foreign cash buyers who want to buy the property without seeing it. Untimely, you never get the money: The goal is to get you to share your personal information
Can Someone Steal Your House Without You Knowing?
Unfortunately, scammers can steal your property without you knowing. First, they obtain your personal information and use it to forge a deed to pass themselves off as the owners. This makes it easier to sell empty real estate like a vacation home or an unoccupied rental without you knowing.
These safety precautions also apply if you are looking to sign a Florida land trust agreement or a Florida real estate LLC operating agreement.
