Four Daughters Real Estate, Rentals, Selling your Property

Renters and Landlords: Beware of Scams

First off, Happy New Year! …and what a 4 days it has been already. Lots and lots of new activity, from people looking at homes to buyer, rent and with today’s economic reports shining bright with positive job analysis, 4%-5% property value increases anticipated in 2012, and wall street looking stronger, this year is starting out with a BANG!

Now, back to the topic of Scammers…

Over the past 4 days I have been faced with a new challenge. I had a property on the market for rent, in Vernon Hills, for $1700 and I have secured a tenant for it. On Monday I got a call from the owner stating that a woman had called them questioning if the home was available for $800/month ?!?

So I called…

This young lady had been searching for rentals on craigslist.com and came across an advertisement of my listing, posted by someone else, offering a 3 bedroom home for $800/month. She exchanged a number of emails which stated that the owners had to move to Africa, are looking for a good tenant, even sent over a rental application, but requested that the prospective tenant mail $1,600 ($800 security deposit + $800 1st month’s rent).

This tenant had not rented before, drove by the home and saw my FOR RENT sign, and because the price seemed so good she was just about to send the money. Her sister however questioned how she would get the keys. She emailed the people, and they promised to send the keys (to a home they do not own) and she can send the payment then.

Thankfully she began to question all this, and after looking up the public records online, she realized that the owners of the home and the people she is communicating with do not match. She almost got scammed.

I advised her to contact the Police, avoid “too good to be true” rental opportunities and she suggested that maybe working with us may be a safer way to go. I then went on craigslist and posted a SCAM ALERT.

An hour ago I receive a call from a gentleman who saw my SCAM ALERT, and stated that his home (which is listed by another Broker) had just experienced a similar situation, except the people who came to the door were told to walk the property, and to send $1,600 if they liked what they saw. This home owner called the Police right away and now is very concerned about all new and even legitimate prospects walking through his home.

I don’t blame him.

So, what next?

TENANTS!

  1. If it sounds too good to be true, it is.
  2. Always meet the people locally before exchanging any money, and please schedule a showing first.
  3. Be aware that there are real scams out there, and no matter how legitimate it sounds, trust your instincts before releasing private information or funding.
  4. Consider working with a local Realtor. Realtors and private landlords will request an application, credit check and often criminal background report. By the time you are presenting this information, you would have stepped in the home and have had discussions with real people working with the property.
  5. Here are some craigslist.com links for additional scam resources: Scam Resources from craigslist.com

LANDLORDS

  1. People wanting to walk the grounds of a listed property is not uncommon, and although I always found it foolish (Dogs, home owners wondering what you are doing, concerned neighbors, ect). However….
  2. If you are listed for rent / sale with a Realtor, NO ONE should ever enter the home without a scheduled appointment or MLS registration. Today we utilize a link on the MLS called ShowingAssist. If the home is vacant and does not require an appointment it makes it easier for both Realtors to use this feature because it sends entry information in exchange for showing agent validating of who they are via the MLS. It is up to your Realtor to remind people against unaccompanied showings, and not to give out the codes to anyone other than licensed professionals.
  3. If you live in the home and are listed or not, everyone coming to see the house would make an appointment, and if a Realtor – they should have a business card. “Ask for it” but to be perfectly honest, anyone can get a business card. 

As a Realtor doing showings I have the ability to validate who I am via business card, pocket Broker ID card, copy of the listing sheet, confirmation of the appointment, info regarding private lock box codes, not to mention I am dressed to work and rarely alone.

Landlords, What NOT to do:

  1. Let children opens the door.  (We do not enter until I see the parents, and ensure they know we are getting ready to enter)
  2. Young teen or single college aged kid home alone during showings. Although with proper representation he/she may not be in harm’s way, it is recommended that he/she doesn’t just go back into their room and hang out, but remain visible, sit on the porch during the showing, etc.  Educate your teen to ask for proper documentation, and even go as far as having them shut the door and call the Realtor or parents to confirm an appointment. Never allow them to show the home to an unrepresented and unverified looker.
  3. Avoid showings by random person knocking to view the home. Unlicensed people have nothing to lose, and although 9 out of 10 may be just fine, we’re thinking of that 1. Use your best judgement.
  4. Large group of people, especially without representation. It’s hard to watch everyone, and although I hope you removed all temptation prior to offering the home for rent, or sale, more people means more to watch out for. It is easy for one person to distract you while another is doing something they shouldn’t.

What You Should Do:

  1. If you aren’t worried about items in the home, but worry more about personal safety, go outside or decline the showing if not comfortable.
  2. When reviewing applications, make the calls for references, check credit and background. There are “professional scammers” renting homes without proper credentials willing to stop rent payments and squat in your home until the police removes them (3-6 months later / $1,500-$3,000 for eviction)
  3. Always request a cashier’s or certified check for the 1st month’s rent and security deposit. Nothing worse than the first check bouncing, while the people are already moved in.
  4. Hire a professional (usually 1 month’s rent commission) and let them shield you from much of this
  5. Trust your intuition, but really trust your research.

Rental market remains strong and it is a very viable way to make money, prevent foreclosure, etc. With research, careful consideration and often proper guidance, you will avoid most if not all scams and shabby tenants / landlords, but you got to put in the time and effort.

-Mario Bilotas, Four Daughters Real Estate

If you have any questions, please email mario@fourdaughtersrealestate.com
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2 thoughts on “Renters and Landlords: Beware of Scams

  1. Hello Alan,

    I call them “professional tenants”, and although true and very disappointing, they are hard to distinguish from the real deal. Often well dressed and spoken, willing to accommodate various requests, pay fees and sometimes even with decent credit. As a licensed Realtor, I am not offering any legal advice, however here is the process we use for each and every tenant screening process, to prevent these PT’s:

    1. Run their credit and background check, and do not accept theirs. If they are willing to go through the process and pay the $30-$50 fee (per adult), you’re heading in the right direction. We use mysmartmove.com which for $30 does credit and background via TransUnion in one shot, it is a free service for the landlord, and only requires the tenant’s email address.
    2. Request a hard copy application to identify how many people, pets, cars, etc.
    3. Request 2-3 Months of employment pay stubs to verify employment and amount of income. Tenants will often fluff the monthly amount and note most payments are bi-weekly, so do the math.
    4.If you are not 100%, but tempted, offer a 6 month trial month-to-month agreement which would allow you to break lease with 30 days notice (in IL, not sure about other states). If they prove themselves, you can sign them to a longer lease or keep M-2-M status. Remember, just because someone doesn’t sign a 1 year commitment, doesn’t mean they will keep it, so risk is minimal.
    5. Always request a cashiers check for 1st month’s rent and for the security deposit to ensure that funds are secure prior to move in.
    6. Pets – if you agree to allow pets, collect a pet deposit separate from the “human” security deposit. You can agree to refundable, non-refundable, but ask good questions about the type of pet, and how many. If someone says they have 2 dogs but are willing to move in without them – BEWARE, as 9 out of 10 times these pets will start coming around, and not too many people are willing to part with their pooch. Same applies when someone has 2 pets and is willing to just move in 1….request pet deposit upfront and make it refundable if no pets move in.
    7. Call the references and do additional research especially if previous landlord was a family member as they will say what ever helpful for their family.
    8. Arrange for Auto-Bill Pay that many banks offer today to automatically withdraw funds from their account on the 1st of the month, or date you mutually agree to.
    9. Check them online, Facebook, etc to see what they like to do, post, etc.
    10. Meet them in person, ask good questions, make assumptions based on your own experiences, and most of all, use your gut.
    11. If someone offers to send you a cashier’s check, especially out of the country, under the premise of a job transfer to the US, and asks that you deposit it toward security deposit, and mail them the difference – this is a SCAM.

    A tenant / landlord relationship is a financial relationship between complete strangers. Although there are plenty of slum lords and professional tenants, there are also many wonderful people that have suffered due to the economic crisis and can be great tenants with credit blemishes. It is important to establish mutual trust, confidence and outstanding communication. Good luck!

    Mario Bilotas | Managing Broker
    Four Daughters Real Estate

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  2. Great advice! I wish there was a blog to warn landlords about scam artist tenants!!!

    Landlords beware in California!

    San Diego, Imperial & Los Angeles counties for the following people :
    Isabel Moran & Charles Howard

    Professional movers? Perhaps. They sign a lease and pay for the first few months & then stop paying all together. Living rent free until hit with another unlawful detainer or lock out by police! Truly sad that these types of people exist actually! And then they move on into your place pulling the same type of scam…

    A vicious cycleH

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