Local: (305) 235-4571 Toll Free: (800) 547-0006
We service all florida and can close you anywhere

What Is Real Estate Fraud in Florida?

June 10, 2024

Facebook Twitter LinkedIn Google+ Pinterest WhatsApp
Copy link Your browser does not support automatic copying, please select and copy the link in the text box, then paste it where you need it.
A Lady With Her Hands on Her FaceFlorida's real estate industry has flourished for many years but, sadly, concerns related to real estate fraud have never gone away. The demand is high in several parts of the state; many people make the wrong decisions in a rush to grab an offer sooner than the rest, and there's no shortage of scammers waiting to take advantage.

Real Estate Fraud: Definition and Repercussions

When we talk about real estate fraud, we refer to deceptive practices where parts of a real estate transaction are altered to extract money out of unsuspecting victims. As such, this type of fraud can seriously affect sellers, potential buyers, mortgage holders and other lenders, and even licensed real estate companies.

This is a general definition since many shady practices may fall under the umbrella of real estate fraud, with legal repercussions to match the severity of the crime. Some of the most common are:

  • Property deed fraud:In these cases, someone resorts to identity theft or a fake property title to pass as the property's rightful owner. This is usually done with the goal of selling the property and reap all the benefits.

  • According to an article by Fox 13 News, property deed fraud is a growing problem across different Florida counties, partly thanks to the switch to online transactions. It also states that over 54% percent of real estate professionals experienced property deed fraud during the second half of 2023.

  • Mortgage fraud: This happens when borrowers knowingly present inaccurate information and/or forged documents to increase the financial benefits of the mortgage agreement. They may lie about pending debts, their annual income, and employment status to showcase a degree of financial stability they do not possess.

  • Value fraud: This one is easy to guess. It happens when sellers embellish information, omit details, and inflate prices to give a false portrayal of the property's market value. Common instances of value fraud involve sellers withholding information about structural defects like leaks, plumbing issues, pest infestations, etc.

  • Foreclosure fraud: When a mortgage holder forecloses a property under false/unclear terms, owners may lose their homes and years' worth of investment.

These are the main types of fraud if we focus on practices that directly affect a person's ownership rights during or after the closing. You can check out this article by SEON to learn about other crimes involving rented properties or money laundering scams.

Avoid Falling Victim to Real Estate Fraud

Two People Talking over a DocumentA real estate transaction has no chances of being successful if the parties involved don't do due diligence early on. You can start be checking all the available records, but getting the assistance of an escrow professional can save you a lot of stress after you make the commitment to follow the transaction to its end (closing).

It's in the company's best interest to do business with certified parties; no one wants to be involved in a fraudulent scheme and real estate transactions are expected to oversee the process, so it won't help their reputation if something escapes their notice. Because of this, the company will likely have means to veto all relevant parties at the beginning of the process and call out any suspicious behavior later on.

Other specific ways to prevent real estate fraud before it affects you:

  • Tile searches and record reviews: The property title is the main asset to confirm who is the property's rightful owner. This is why title searches are usually conducted during the early stages of the process, ideally by a licensed real estate company. The company's technology and experience in the local market is essential to spot the most subtle instances of fraud in less time.

  • Property inspections: An appraisal of the property is another important to take after embarking on a real estate transaction. Most of the structural issues mentioned in the previous section can be uncovered through property inspections with your real estate agent. Follow-up visits are a must if both parties agree on a deadline to make the necessary repairs.

  • Looking after escrow funds: The escrow funds represent the earnest money that buyers transfer at the beginning of the transaction. They're held by a neutral third-party and become the main pint of contention when there's a disagreement between buyers and sellers. Victims of fraud are entitled to their share of the funds, but they may still suffer financial losses if there are no clauses addressing their specific problem in the escrow agreement.

    Don't sign any binding documents before having your real estate lawyer assess the information. If your contract has clear terms to protect your investment, you can go into all the other steps with more confidence.

And on that note, don't hesitate to voice your reservations if you feel uncomfortable at any point of the process. You may feel like the initial appraisal wasn't thorough or that the data on record doesn't match the information you've been given during the negotiations. If you have any misgivings, your real estate agent can take a closer look before the settlement, and Key Title & Escrow will provide all the services you need so you don't have to divide your attention while reviewing the documents at your disposal.

Don't fall for scammers and protect yourself against real estate fraud! With Key Title & Escrow, you can secure a smooth process and the guidance of Florida's most knowledgeable team. We can help you through all the steps leading up to closing and you don't have to spend half your time worrying about shady practices. Just call (305) 235-4571 or toll-free at (800) 547-0006 if you want to learn more. And you can also send us a message via the contact form on this page to get more information straight from our professional staff.
Facebook Twitter LinkedIn Google+ Pinterest WhatsApp
Copy link Your browser does not support automatic copying, please select and copy the link in the text box, then paste it where you need it.
Leave your comment
0 Comentarios
Chat Agent Image
Online Agent
Chat Now