Craigslist Scams Buyer Beware
My best friend is looking to rent an apartment in North Jersey. She started her search on Craigslist, which happens to be a free, local classified listing system (duh, as if you didn’t know this already).
It is a classified listing system that people have come to rely on since it’s free and easy to use.
Thus, it is one of the first web places she considered when looking to find an affordable rental.
My best friend knows I list and rent residential properties as well. So, when the owner of a Craigslist ad that she responded to did not contact her back after she emailed the individual, she wanted my advice and services, which is alright by me. But what was odd about what the latter situation was a reapearance of the same ad, posted by same craigslist poster. This time I contacted the individual of the reposting. The Craigslist poster returned my inquiry with an email asking me to get a copy of a free credit report. The poster referred me to a website where I could get a free copy of my credit report. Hidden in the link in the reply email was a tracking code, which leads me to believe the apartment was not real and that the Craigslist poster was simply looking to get paid from clicks to the free credit reporting site.
Is it a Craiglist Scam? That’s debateable. But Craigslist is notorious for it’s lack of security and for it’s lack of policing people who learn how to manipulate Craigslist for profit.
Here’s another Scam I found on Craigslist within the same week. This scam has to do with real estate yet again.
I found a listing of a house for sale that happens to be listed by owner on Craiglist and listed by a real estate agent/Realtor on the Garden State MLS. Since one of my buyer clients had made an offer on said house in that past, I found it odd that the owner listed the home for sale on Craigslist for $250,000 the house on GSMLS was listed for significantly less.
So, I contacted the agent and asked if the owner listed the house for sale on Craigslist. The Realtor was clueless even after I sent her the link to the craigslist listing. It turns out the current cash buyer (my client did not win the bid) had an offer on the house and was advertising a resale for obviously a profit, which is not much of a Craigslist Scam as much as it just feels dishonest. It’s legal nonetheless (assuming the contract could be assigned to another buyer). Although, one could argue that the current buyer does not have the right to represent himself as the owner. This happens to be an investment strategy that can be very lucrative for a savvy investor. Most investors refer to it as whole-selling.
If you are following the market as we do, you know that Hud just lifted the 90 day flip rule, which went into effect as of the 1st of February 2010, which means an owner does not have to wait 90 days to resale a property for profit to an FHA buyer (a buyer looking to finance a home through FHA financing). The Federal Housing Administration, which insurance purchase notes, once stipulated homeowners had to wait 90 days before being able to transfer title to another owner called title seasoning. Now an owner can sell before the 90 day period so long as the property meets the other FHA guidelines.
In conclusion, when using Craigslist for real estate purposes, buyers or future tenants should be aware of potential scams. Here are some suggestions on how to avoid getting scammed on Craigslist:
- Look for a full ad with a contact person’s name, phone number and email address. If the poster is not willing to share one of the three, it’s likely that the post is a fraud. Please note that users sometime uses a anonymous Craisglist generated email, which is ok.
- When responding to real estate ad on Craigslist, be sure to edit your email signature as to not share your place of employment, assuming you are emailing from work, until you know that the individual is legitimate.
- Deal directly over the phone with the individual and if you decide to meet face to face, bring another person with you. Meanwhile. Alert friends and family members where you will be if and when you decide to visit a property in person.
- Do a quick Google search to find out if the individual has posted before and what did they post. You have have to search name and Craigslist. This is how I was able to determine that the rental ad was a fruad. I saw that the individual had posted multiple ads in different states more than once.
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Good Info. I almost got caught up in a Craigslist scam. Luckily I knew the address well.