Real estate is a significant investment for most people, and it’s essential to protect yourself from potential real estate fraud  that can lead to financial loss and emotional distress. Ontario, Canada, with its thriving real estate market, has seen its fair share of fraud  over the years. In this blog, we’ll explore various types of real estate scams that have affected Ontarians and provide you with practical tips on how to protect yourself from falling victim to these schemes.

Real estate fraud comes  in all shapes and sizes, all of them having one agenda: to try to get money from innocent people. Here’s a list of some of the most common real estate scams.

Rental and Mortgage Scams: 

Scammers often post illegitimate rental listings online, advertising properties that don’t exist or are not available. One should be wary of individuals requesting payment prior to a rental being secured, as they may take the fee and be gone. Mortgage fraud  may occur when someone poses as a broker or loan provider. Should they promise low interest rates or fast approval, be weary of the fine print and always have a lawyer review your mortgage commitments.  

Foreclosure Rescue Scams: 

Predatory lenders may aim for homeowners in fiscal trouble, promising to protect their residences from repossession if they provide sizable upfront fees for private lending. 

Investment Fraud:  

Some scammers promote fraudulent real estate investment opportunities, promising high returns, but often disappear with investors’ money.

Title Fraud: 

Identity thieves can illicitly transfer property titles into their own names, leaving the legitimate owners unaware until it is too late.

Now that you know the nature  of real estate scams prevalent in Ontario, let’s explore how to protect yourself from falling victim to these schemes.

Verify Property Ownership:

Prior to engaging in any real estate transaction, individuals should ensure they verify the ownership of the property.. Any good real estate lawyer will ensure that title to the subject property is free and clear of any and all encumbrances, and ownership is legitimate.

Work with Licensed Professionals:

When purchasing or selling  real estate, it is advisable to work  with accredited real estate agents, mortgage  brokers, and real estate lawyers. Make sure to examine their qualifications and investigate to see if there are any disciplinary activities taken against them. Licensed professionals are held to ethical and legislative guidelines.

Research Property Listings: 

When looking for a rental property, it is important to investigate the listings. Be cautious of listings that appear to be significantly different in  price than other listings,  such as those with exceptionally low rents for desirable areas. Additionally, it is recommended to visit the property and meet with the landlord in person prior to making any payments or commitments to a lease

Be Cautious with Upfront Payments:

Never make substantial upfront payments, such as deposits or application fees, without verifying the legitimacy of the transaction. For rentals, deposits should be placed in a trust account, not paid directly to the landlord. Verify the existence of the property and the landlord’s identity before making any payments.

Educate Yourself on Mortgage Terms:  

When submitting an application for a mortgage, it is important to familiarize oneself with the standard mortgage terms and applicable interest rates. Be wary of lenders and brokers who offer exceptionally low rates or quick financing.. It is always advisable to read the terms and conditions of the mortgage agreement carefully, at times with the help of a competent lawyer.

Avoid Pressure Tactics:

Fraudsters oftentimes resort to aggressive strategies to coerce people into hurriedly making a decision. Whether it be a proposal restricted to a specific time frame or a seemingly rare investment opportunity, one should carefully evaluate their options and speak with competent lawyers prior to committing to anything.

Stay Informed about Current Scams: 

Try to be aware of the current efforts to defraud in your area. Government bureaus and consumer organizations regularly share cautions and warnings regarding  trending frauds. Sign up for notifications in order to be aware of possible risks.

Report Suspicious Activity:

It is always helpful when individuals  report suspicious activity.  If you  come across a potential fraud or believe   you’ve been taken advantage of, it should be reported immediately to the local police, the Canadian Anti-Fraud Centre, and the Real Estate Council of Ontario (RECO). Notifying the appropriate authorities of suspicious behavior or deceptive tactics can help to protect people from becoming victims..

If you’re interested in investing in real estate in Ontario, it is essential to understand the potential risks. As such, it is advisable to conduct due diligence and solicit trusted guidance by a real estate lawyer in Oshawa. Utilizing the resources available and staying updated on current fraudulent schemes will minimize the chances of becoming a victim of real estate fraud.