Too good to be true? Probably a rental scam. Mike explains how landlords and tenants can reduce the risk on this trend.
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Dunfee Real Estate Services, Inc.
DRE # 02026232
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TRANSCRIPTION:
Imagine, if you will: you pull up to the appointment to show this house you're renting, and there's a strange car in the driveway. You get out, and standing in the living room around a bunch of cardboard boxes is some guy you've never seen before. You ask him, "what are you doing here?" and he says, "The same thing to you, what are you doing here? I just rented this house, get out of here." And, you both look at each other and realize you've both been scammed.
Fake rental scam, that's when someone rents out a house that doesn't belong to them. This happens all the time. Here's what they do: they look for houses that are legitimately vacant and for lease. They turn around, make their own set of ads, maybe they find them on Zillow, and they post an ad on Craigslist. And then, usually for less money, and then they rent it out to gullible people who are happy to find a great deal on a house, and someone maybe he's not going to scrutinize their credit so much. This happens all the time, every property management company can tell you about this and so can any landlord that has my multiple houses out on the market. This is crazy, this is particularly bad for a prospective tenant. Usually, the ones that fall for this are the ones that maybe can't quite afford the house, it's usually their last little chunk of money, and a lot of them are the ones that maybe have less than perfect credit that are having maybe more challenge finding a place to live.
Their last little chunk of money goes to some scammer, so puts them in a desperate spot, and which creates a problem for everybody. So, if you're a prospective tenant, I've got four tips for you to think about: one, if you're not being asked to sign a formal lease agreement, it is a scam. Two, if you're not being asked to fill out a formal application, if you're not being asked to provide a photo ID, if your credit is not being pulled, it is a scam. Three, if the price is unusually low, it is a scam; and number four, if it seems too good to be true, it is a scam. I'll just say, never hand over money to somebody when the deal seems too good to be true. Hey, check out who you're renting from, you're probably safer going through a property management company, but check them out: do they have a physical address? Do they have a website, a phone number you can call? Reviews you can check out? It's pretty easy to see if they're a real up and going concern or not. Also, if you're gonna rent from a private party, that's fine, but it's also perfectly fine to ask them to show you that they in fact own the home, have a face-to-face conversation with them, maybe say, "can I see your driver's license, are you really the person?" You know, do you, "show me a utility bill," they should be fine with that. Maybe ask a local realtor to look up who actually owns this house. "Oh yeah, that's Mr./Mrs. Smith, yeah, that's the people that we met." "Oh, that's fine." If, by the way, the landlord gets unusually insulted by the question, I personally probably wouldn't hand them my money, it's they're checking you out, you might as well check them out too. At least at some level. You find that painful?! How painful do you think it would be to figure out you just handed $3,500 over to someone who doesn't even own the property. I mean, think about that, that's gonna suck. Now landlords, now that you know these scams are happening, and they go on all the time, I mean, that's probably the first step, the next I've got five tips to help reduce the odds of this happening to you. Step one, have your name and information posted somewhere on the property for maybe even a couple places, that way if a prospective tenant shows up there, they'll know, "Hey you're not XYZ Management Company, you're not Mr./Mrs. Smith, that number doesn't match the number that's on there." They'll know who they should be renting it from. Also, if you go by the property, and you see that information has been taken down, your property is probably being targeted, and who knows, the scammer might be doing it to multiple people at the same time.
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