Selling your home in Ontario needs to be a carefully thought-out process. Even if you need to sell the property quickly, there are a lot of pieces to the puzzle. Just a few of the details you’ll need to put together include property tax receipts, surveys, renovation contracts, and prepayment penalties if you’re breaking a mortgage contract.
Still, selling a property that can include a condo, cottage, or house is a natural move forward for many Canadians. Unfortunately, they need to be on the lookout for the following real estate scams when selling in Ontario.
What Exactly Are Real Estate Scams?
Real estate fraud can damage your finances. Victims can find out they’ve had mortgages taken out in their name, and, in a worst-case scenario, they don’t even own their own home any longer.
There are quite a few different variations when it comes to real estate fraud and scams. Following are some of the most common ones you need to be aware of.
As the name suggests, this happens when someone steals the title to a property usually by impersonating the owner. After the bad actor gets the title, they usually try and sell the house or take out a mortgage on it.
An example of this type of fraud occurred in Toronto in January 2022 and went viral online. While a homeowner couple was out on vacation, strangers had moved in, hired a realtor, and sold the house. Ron Alphonso from Mortgage Broker Store spoke to Global News about this particular scam.
Keeping your personal information as private as possible is a good way to defend against title fraud. This scam is closely related to identity theft. It sometimes employs phishing which is the method criminals use to trick people into giving out personal information.
If you’re having problems making your mortgage payments, you can find yourself facing foreclosure. Unfortunately, that’s another time when scammers will try and trick you out of the title to a property.
Criminals try to trick unwitting homeowners into transferring the title over to get a loan to keep the mortgage current. The payments that you make to these unscrupulous companies get kept by the fraudsters. These criminals also keep the title to the property. They often remortgage or resell it quickly.
Bad Actors Swindle People
Foreclosure fraud and mortgage fraud are similar. Bad actors here use a variety of unscrupulous methods to swindle people out of their money. They also pitch mortgage terms outside of the person’s budget. The Financial Services Commission of Ontario has put together a list of red flags to be aware of. For example, mortgage brokers are required by law to supply written information about the fees they charge.
There are a variety of other money-laundering schemes that work in the real estate sector. Some criminals can even bribe a student to buy a cottage, condo, or home. The place becomes a principal residence and reselling it becomes very lucrative. The student transfers all the profits.
The best solution is to prevent yourself from getting in trouble in the first place. Here are a few tips on being proactive.
Other criminals used forged documents. They drive up the price of the property by selling it back and forth between an accomplice. One applies for a mortgage product for a price well above the property’s worth. Then they sell and both disappear with the money.
Preventing Real Estate Scams
Unfortunately, scams and fraud have been on the rise since the pandemic. According to the Canadian Anti-Fraud Centre, people lost $106.4 million to scams in 2020. The previous year, that number was $96 million. Here are a few things that you can do to prevent being scammed when selling a house in Ontario.
- Do a land title search with your territorial or provincial registry office. That will show any liens registered and/or mortgages registered against the title.
- Buy title insurance to protect against scammers and fraud. In the previously mentioned example involving a Toronto home, title insurance should pay out and return all parties to where they were before the fraud occured.
- Watch for phishing emails. Hover over any of the links that come with these so you can see the entire website. Typos in the URL and messages that have a tone of urgency are two red flags.
- Due diligence is important. Especially if you find yourself in a position where you need to sell a home fast. That means researching the mortgage company that you’re thinking about dealing with.
What To Do If You’ve Been Scammed
It doesn’t matter if you need to sell a condo or cottage fast. If you think you’ve been the victim of real estate fraud you should report the incident to your local police and get advice from your lawyer. Those are the first few steps you need to take. Read on to find out about the others. Remember, it’s possible to sell a cottage fast as well with a private lender.
Credit Reporting Companies
Don’t forget to contact the land registry office where your property has been registered. You should be able to find one for local towns like Vaughan, Richmond Hill, Newmarket, and Oshawa as well as others. Don’t forget your credit rating might be affected too.
Mortgage Broker Store has a dedicated team with over 15 years of experience with mortgage products and your finances. We supply free quotes and expert advice. We can help you get the right mortgage or any other real estate assistance you need. Email email@example.com or call 416-499-2122.