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New Property Scams

by | Mar 13, 2024

Often, on the side of the road, there are handwritten signs with all the charm of a ransom note that say things like “3-br 2-bath home for sale off-market call XXX-XXX-XXXX.” I sat in traffic next to one earlier today that was even less specific about what exactly was being offered, saying “Fixer upper for sale off-market call now.” I don’t even know what kind of home this is; is it five bedrooms or one? Maybe it’s in such bad condition that bedrooms aren’t even discernable at this stage?

I’ve always wondered who responds to these signs. I’m sure some of these “listings” are completely legitimate, and if you’re a very experienced investor, you can make money from these types of sales. However, some of the latest short-term rental scams have made me question these charming handwritten signs more than I usually would.

In Oregon, a new short-term rental host recently learned that her rental property was for sale through a private social media message from a neighbor. Apparently, her latest guest checked in at 3pm and was relatively normal for a good three minutes until 3:03 pm when families with children and babies began arriving to have the guest take them on tours of the home. When the host watched her surveillance footage and played the audio, it was clear that the guest was posing as a real estate broker in order to deceive the families who were potential buyers. These scam listings would not likely appear on any multiple listing service, unless handwritten roadside for-sale signs count as a makeshift multiple listing service of sorts.

When I read about this scheme, I momentarily wondered how a short-term rental guest could actually sell a home without permission, which of course was never the scammer’s goal in the first place. The scam real estate broker was showing the home to first-time homebuyers for a price that was unbelievably affordable. The broker would likely collect escrow payments (maybe even down payments if the buyers were extremely naive) from these homebuyers, and then would vanish without a trace, except for a fake name and some strange camera footage.

Another far more widespread (and far more ludicrous) rental scheme was recently uncovered, which involved a bait-and-switch listing conspiracy involving over 10,000 properties listed as short-term rentals. The two scammers would create multiple listings for the same property and double-book a rental for two different prices. Then, they would invent fake plumbing problems or other last-minute excuses and use these fake problems to switch the lower-paying booking to a cheaper, unoccupied property at the last minute. This created an unofficial bidding war over rentals that no one realized they were participating in. All of this apparently brought in $8.5 million in ill-gotten gains.

This double-booking scheme is strange on such a wide variety of levels that it’s surprising it worked for 10,000 different bookings. Both of these schemes are reminders that all of the online identity verification we rely on daily can still be circumvented if criminals are passionate enough about their craft. This is also a good reminder that handwritten road signs are not the most reliable multiple listing service.



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