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Miami Renter Foreclosure Scam – Don’t Let This Happen To You

Yesterday I had the unpleasant experience of having to tell a Miami tenant that she had been scammed. It’s interesting that as I told the story to different people later in the day, some were surprised, but most were not. This is Miami after all. Capital of the scammers, is what most seem to think.

I still believe that there are lots of good people in the world. However, it’s hard to deny that there is lots of real estate fraud going on in Miami. The fraud that I am talking about is not necessarily being done by agents. This was done by someone who has no scruples, and can sleep at night, after taking a family’s last bit of money to put them into a home he knows they are going to be evicted from shortly after they move in. Here’s what happened:

Tenants are being placed into vacant Miami homes fraudulently by people who claim that they represent the home owner, but they really don’t. In yesterday’s case, the vacant home was actually a house that is bank owned, and is listed for sale by a real estate agent. When I arrived at the home to show it to my buyers my expectation was that the home was vacant and available for sale. In actuality, the home was for sale, but no longer vacant.  A family had moved in the night before, furniture in place, utilities turned on and the whole nine yards.

Someone had taken the key from the lockbox and showed it to this family a few days before as a possible rental. He offered it to them at 30% under market value – first red flag.  He then drafted up a “lease” and went through the motions of signing it, collecting first month and security and providing a set of keys.  And voila!  You have just been scammed out of $3,000.

So how do you, as a tenant, protect yourself from this sort of thing?  Be wary and take extra steps to make sure the person who is renting you the property has the legal right to do so.  Here are extra measures you should take:

  • =After calling and getting the address to meet the person at, check to see if the home is listed for sale on the internet.  Check the address at www.realtor.com.  If it is listed on there, it will tell you by whom.  Call that agent and ask if the home is also listed for rent.   If the agent tells you the home is NOT listed for rent, congratulations, you just spared yourself the heartache and financial loss of being scammed.
  • =Did you see the ad for the rental listed on a post somewhere?  I mean an actual street post.  Four years ago, I reported a similar (OK, identical) story on this blog and the tenants had seen the sign on a street post.  Red flag.  This does not mean that you won’t be scammed if you saw the ad on Craigslist or somewhere else instead.  It just means:  Caution!  Possible scam up ahead.
  • =Ask the person for their business card.  Again, this will not prevent anything, because anyone can print business cards saying anything.  But it’s an extra layer of protection.  The business card will have all the regular information on it, including their name, phone number, company name and business address.  If any of these are missing, another red flag.  Is the number that you called them on not the same as on the business card?  Another red flag.  Plus there are ways to verify a lot of this info.  Details below.
  • =After you ask for their business card, if the card says they are a real estate agent, ask to see their real estate license.  Any licensed professional should be carrying theirs and be able to whip it out of their wallet and show it to you.
  • =This one is important – after asking for the real estate license if they claim to be an agent, or after getting their business card which makes no mention of being a real estate professional, ask for their driver’s license.  If they give you grief about showing you their driver’s license, just run the other way. Fast. Again, driver’s licenses can be counterfeited, but it takes a lot of effort to do so and do so well.  Being shown one does not mean you are in the clear, it just means you have more homework to do.  If you DO get scammed anyway, you will be able to tell the police that you saw their drivers license and tell them the name that was on there.  If they were stupid enough to show you a real drivers license the authorities will have an easier time of catching them.  But this is not our goal.  How will it help you to know that your scammer has been caught?  No, prevention is the name of the game.
  • =If the home is being rented way below market value – red flag.  Yesterday’s had a market value of $2,000/mo but the scammer rented it to them at $1,400/mo.  Why would a landlord give up $600/mo?  That’s $7,200 a year!  Why?  Because it’s not real, that’s why.  Yes, landlords give concessions at times, but not 30% below market value for no reason.  If it sounds too good to be true, it is.
  • =Don’t take care of anything right then and there.  They are going to want cash or a money order from you anyway, so there will be a second meeting for sure.  Before you come back to that second meeting do MORE homework as follows!
  • =Check the Miami-Dade Property Appraiser site to verify the owner’s name.  If it’s a bank name, red flag!  Some banks ARE renting their homes instead of selling them, but not many.  And if they are renting it, the person representing them will definitely be a real estate professional, and will NOT give you any problem when asked for any of the above items.
  • =Go to Google and google everything!  Google the address, google the person who met you, google the owner’s name that came up in the Miami-Dade site, google the company on the business card.  Look for inconsistencies.  You can sometimes find a phone number for the owner online.  Trust the number only if it’s on a website which posts legitimate information.  For instance, finding an ad on Craigslist doesn’t prove that is the real owner.
  • =Is the company on the business card a legitimate company?  You can check businesses here.
  • =Is the person a real estate licensee?  Check here.

These are just some of the ways you can protect yourself against being taken advantage of.  And there are other things renters should be aware of, but that’s another post for another day.  For now, please be extra cautious when renting from someone who you just meet at a vacant home and not at their place of business.

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These articles are not intended to give legal or tax advice, and you should consult your attorney or financial advisor for additional information.

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