If you’re reading this right now, there is probably no need to tell you that this is a very exciting time to be in real estate. The economy is beginning to pick itself up from the slump it’s been in the last couple of years, but prices in the real estate market are still at historic lows, meaning that investors have the prospect of bringing in an excellent return on their investment in the short to medium term. With so many people interested in the opportunities available, many of whom are newcomers to the world of real estate, scammers and self-appointed “experts” have had a field day and many an unsuspecting, starry-eyed potential real estate investor and their money have been parted.
Naturally, you’d rather steer clear of these kinds of shady operators. Now of course, they’re not all out there with the intention of scamming you, but many of them aren’t nearly as experienced in the market as they would have you think. So how are investors to recognize inept realtors and amateur investors passing themselves off as gurus or out and out scam artists? There are some tell tale signs which you should be aware of and below, we’ll explain a few of the things to watch out for, especially on the web.
One: anyone who uses hyped up, subjective descriptions of themselves or their professional qualifications, especially those which are difficult or impossible to substantiate, is either a scammer or is just trying to hide the fact that they don’t know what they’re talking about.
If you see language like “the leading expert in the field of real estate” or “most highly acclaimed expert”, this should raise a red flag instantly. If you look closely, you’ll see all kinds of baseless claims here – by contrast, real experts will use dry, factual statements about themselves and their careers.
Two: Watch out for anyone who claims to do absurdly large numbers of real estate deals. Keep in mind that these “gurus” don’t have any more hours in the day than you do and if they seem to spend all of their time promoting themselves as real estate investment experts, it’s not likely that they do many, if any real estate deals themselves. Beware anyone who makes these kinds of claims.
Three: If it sounds too good to be true, it is. Look carefully at any testimonials they use online or in their print or broadcast advertisements. If you see claims which just simply sound unrealistic, chances are (and I’m being charitable here, what I mean is CERTAIN) that it’s a scam or an inexperienced real estate investor hoping no one will notice through all of their hype.
Four: Watch out for any of the following words and phrases (this is applicable even outside of the real estate market, so keep these in mind) – they indicate that what you’re looking at is almost surely a scam and is at best a poor investment.
“Anyone can do it”
And perhaps the biggest red flag of all….
“This is not a get rich quick scheme”
As an investor or prospective real estate investor, it’s important to be careful. All too many people are lured by these pie in the sky claims and assurances of great financial gains with no risk. Real estate isn’t magic – it’s an investment and there are always risks involved. When you work with a reputable (as in not anyone who makes the kinds of claims we’ve discussed here today) realtor and get your information from real-life real estate investment professionals, you will be able to minimize your risks and increase your odds of bringing in a healthy return on your investment.
If I’ve said it once, I’ve said it a thousand times. If it sounds too good to be true, it is, especially when the subject is real estate. It’s true that it’s a great time to get involved in the market – but as always, you need to be careful if you want to be a successful investor. When it’s your money on the line, it pays to be skeptical: these are words every real estate investor should live by.