Protect Yourself Against Rent-to-Own Scams
Rent-to-own transactions are a completely legitimate, legal way to purchase a home. However, as in any industry, you may encounter a few bad actors in your search for your dream home. Protect yourself by implementing the following three methods for guarding against real estate fraud in the rent-to-own business.
Don’t Pay Cash
A common red flag of real estate fraud is a demand for cash payments – which are untraceable – for the security deposit, first month’s rent or other fees. If your prospective landlord refuses to accept a personal check or a cashier’s check from your bank, it’s time to get suspicious. Ask questions and be firm in your refusal to pay cash in order to avoid the landlord pulling a disappearing act with your hard-earned income.
Demand a Written Lease Agreement
In the world of buying and selling houses, even in a private rent-to-own scenario, a lease agreement is standard operating procedure. Any above-board landlord should be ready and willing to provide one. Make sure to read any proposed agreement closely, though, too. It should spell out any deposits or payments, and include the landlord’s full name and address.
Insist on Meeting Your Seller/Landlord in Person
Sure, some legitimate landlords live out of town, and some practiced scammers are willing to meet you in person. Still, it’s best to insist on meeting your prospective landlord in person before any money changes hands. An in-person meeting gives you a chance for a gut-check if you suspect you’re being defrauded, and it also provides an opportunity to meet the person you’re entering into a financial relationship with.
If you truly aren’t sure whether you’re entering into a scam, enlist the help of a realtor. If the prospective landlord is unwilling to speak to a home sales professional, it’s probably time to look for your dream home elsewhere.
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