How to Keep From Getting Scammed in a Real Estate Deal

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By Geoff Williams

You’d be foolish to think you couldn’t be fooled in a real estate transaction. While the majority of sellers, buyers and renters are presumably honest, there can be additional players with skin in the game, including landlords, real estate agents, bankers or workers at title agencies.

As Sacramento real estate broker Alexis Moore observes: “The crooks don’t always have on orange jump suits. Many are former real estate professionals who are using the system.”

So how do you know if you’re about to be scammed? You can’t, but there are warning signs and steps you can take to protect yourself. Even if you are working with honest people, there are smart ways to approach buying, renting or selling any home.

Don’t Rush

Sometimes, you really do stumble into a great deal and, yes, you want to act quickly before someone else stumbles on — and snags — this great deal. But rushing means you have little time to question what you’re doing.

Joe Rand, managing partner for Better Homes and Gardens Rand Realty in New York and New Jersey, says that about once a week, he hears of a renter who saw a house but didn’t actually go inside.

“The person will tell the renter that they’ve relocated, they need to rent [the property] quickly, here’s a photo. Just go look at the place, but I can’t show you the inside,” Rand says.

The renter will send the “landlord” deposit money and show up at one of his business’s many offices, asking for the keys. Of course, that’s when the renter learns he was working with a con artist who had simply taken a photo of an apartment and let the victim’s imagination fill in the blanks.

It may seem crazy to rent property without touring the interior, but as Rand explains: “What does every scam depend on? Somebody thinking this is an amazing deal and they have to jump on it.”

Vet People and Businesses

Just because someone has a LinkedIn page doesn’t make him or her a swell human being. For instance, earlier this month, at least 14 unsuspecting home buyers in towns around Monroe County, New York, paid down payments to a real estate agent whose license had reportedly expired. The homeowners wrote him checks but instead of putting their funds in escrow, the agent allegedly pocketed the money. At the time of this writing, the accused agent, John Valerio, was cooling his heels in the county clink.

But one can hardly blame the victims. Valerio apparently was, until very recently, a licensed real estate agent. He doesn’t have much of an online presence, but his LinkedIn profile states that his company, Lamplighter Realty Inc., has been in business since 1971. What’s more, his business is listed in the Yellow Pages.

This scenario may happen more than we’d like to believe. Moore says she recently reported an unlicensed colleague who was still selling homes. Your safest bet is likely to walk into a bustling, reputable real estate office to meet with a new agent. But if you meet an agent randomly who has little more than a business card and a charming demeanor, ask to see an agent’s license to ensure it’s current, Moore suggests.

“We all carry a plastic card like a credit card in California, and it says the person’s name and their title, like broker or sales agent,” she adds.

If you’re really concerned, check online to see if anything concerning pops up. To find someone you trust, ask for a referral from a close friend or family member.


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Should You Hire a Friend as Your Real Estate Agent?

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By Susan Johnston

As the spring house-hunting season approaches, many Americans will be buying or selling a home — and some will enlist the help of a friend or relative who happens to work in real estate. But experts caution that hiring a friend as your real estate agent could backfire.

“Realtors tend to be a social bunch,” says Jon Sterling, who manages a team of agents for Keller Williams Realty and specializes in working with real estate investors. “I can’t say never hire a friend, but you shouldn’t hire them because you’re a friend. You shouldn’t do it as a favor — you should do it because they’re good at what they do.”

In some cases, people find that it’s easier to hire a friend than invest time interviewing several agents. In fact, a 2014 survey of nearly 300 sellers from the Redfin Research Center found that over a third evaluated only one agent before choosing one to list their home.

Before you hire a friend as your agent, here’s a look at potential pitfalls to consider.

1. Your friend may not know the neighborhoods that you want. Whether you’re buying or selling a home, you need an agent with intimate knowledge of the market in that specific geographic area. “I always get calls from cousins saying ‘Oh, you live in Florida, I’m thinking about buying a property in West Palm Beach,'” says Karyn Glubis, a real estate agent based in Tampa. “They assume that you know everything, and even if you live in a certain city, there’s several different areas of the city. I live in a certain ZIP code that I know with my eyes closed. If you ask me to go away from Tampa to [St. Petersburg], I don’t know that area.”

According to Mia Simon, a Redfin real agent based in California’s Silicon Valley, it’s important for buyers or sellers to instead look for “someone who really has the local knowledge, the relationships with the main players and a really good grasp of the inventory.”

2. Your friend may think she knows what’s best for you. If you want a downtown loft and your friend pictures you in a suburban bungalow, it’s bound to create tension. Glubis ran into this issue when she helped her father shop for a three-bedroom townhome and he wanted a move-in ready property, while she showed him fixer-uppers. “He’s like, ‘I am 68 years old. I don’t want to fix up a house,'” she remembers. “People think they know what you deserve or what you want. A friend doesn’t have the boundaries that a client would have.”

Glubis has her clients fill in a “needs and wants” list (for instance, “I want an oak tree in the backyard, but I’m not crazy about hilly lots”). However, she didn’t take that step for her father because she assumed she already understood his needs and wants.

Another potential pitfall is if you’re buying an investment property and your Realtor friend doesn’t educate you on the responsibilities of a landlord because she assumes you’ve already researched it.

3. Your friend may put in less time. A friend helping you house hunt may not want to spend every weekend driving you around instead of working with other clients. That would put the onus on you to search listings and do the legwork. “You’re on Zillow and Trulia doing all your own research,” Glubis says. “You’re telling your friend what you need. The friend is more casual in their searching, making you do all the work.”

4. Your friend may not give you a reality check. You may not like hearing that the list price you want on your home is too high or your offer on a property is too low, but it’s your agent’s responsibility to give you the honest truth and serve as an objective outsider. “The competition [in Silicon Valley] is so fierce that you’re having to waive all contingencies and go way above list price. Having to advise a friend to do that could jeopardize a friendship” says Simon, who has never represented friends but will refer them to another agent on her team.

Discussions about your housing budget or the amount you’re willing to accept for your home might be more comfortable with someone you see strictly as a professional, not as a neighbor or yoga buddy.

5. Disagreements could sour the friendship. “When things go bad it really gets ugly, so Thanksgiving dinner could get weird if you’re in the middle of a really tough transaction with friends or family members and the lines start to blur between your personal life and your professional life,” Sterling says. “I don’t ever want to put my friendships at risk because of a business transaction.” Like Simon, he’ll refer friends in the market to other agents he trusts who could better fit their needs.

Another sore spot for real estate agents is when they handle a transaction for a friend and that friend asks for the commission back, which Glubis says can make things uncomfortable.

That said, there may be situations when a friend-real estate agent arrangement works out. “If the friend is experienced and treats you like a client, if they take their job seriously and know the market you’re shopping in,” Glubis says, then it could be the right fit.


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Jessica Chastain Buys Leonard Bernstein’s Former NYC Roost

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TruliaThe four-bedroom, 3,200-square-foot apartment on 57th Street was once home to conductor Leonard Bernstein.

Movie fans and theater nerds will love this: Academy Award nominee Jessica Chastain has dropped $5.1 million on an apartment where maestro Leonard Bernstein lived for about a decade, and it’s across from Carnegie Hall.

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WireImage/GettyJessica Chastain

The New York Post is reporting that Chastain, a Julliard-trained actress, has bought the classic nine-room, four-bedroom co-op on Manhattan’s 57th Street under a private trust with Italian boyfriend Gian Luca Passi de Preposulo, a fashion executive who also reportedly is a count. Chastain twice has been nominated for an Oscar, as a leading actress in 2012’s “Zero Dark Thirty” and as a supporting actress in 2011’s “The Help.”

As for Bernstein, to watch him at work was like witnessing a miracle, seeing how with just a flick of a wrist or shrug of one shoulder, he could wrest the best from an orchestra. The image of him preparing for performances in the apartment only adds to the aura of the Osborne building, which is steeped in show business history. Bernstein lived there for about 10 years during the time he worked with Arthur Laurents and Stephen Sondheim on “West Side Story,” which opened on Broadway in 1958. Other famous residents of apartment 4B were “F Troop” actor Larry Storch, café singer Bobby Short and most recently, Adam Guettel, the Tony-winning composer of “The Light in the Piazza” and a grandson of Richard Rodgers.

More about the 3,200-square-foot duplex apartment. It features:

  • Tiger-oak floors
  • Hand-carved mahogany doors
  • 14-foot ceilings
  • Five ornate fireplaces
  • Original Lalique glass pane on the library door.


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Rent Leonardo DiCaprio’s Palm Springs Pad for $4,500 a Night

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ZillowLeonardo DiCaprio’s 1964 house in the Old Las Palmas neighborhood of Palm Springs was designed for Dinah Shore.

Looks like Leonardo DiCaprio is adding landlord to his resume. “The Wolf of Wall Street” actor reportedly is renting out his Palm Springs vacation home starting at $4,500 per night.

Props to our pals at Curbed LA for spotting the listing on a rental site. The 1964 modern house, designed for singer/actress Dinah Shore, is located in the sought-after neighborhood of Old Las Palmas, where such bright lights as Marilyn Monroe, Elizabeth Taylor and Elvis Presley vacationed.

The six-bedroom, 7.5-bath house sits on a 1.3-acre desert lot with palm trees and vistas of the San Jacinto Mountains. It’s furnished with the “finest examples of Mid-Century architecture in Southern California, the birthplace of the progressive design movement,” the rental listing says.

Also included:

  • Guest house overlooking the pool
  • Casita adjacent to the tennis court
  • Generous living room with grand piano, fireplace and cocktail bar.

DiCaprio reportedly bought the house last March for $5.2 million, according to Zillow, which said the actor never confirmed the deal but property records link the purchasing LLC to the same address as DiCaprio’s production company.

In 2013, DiCaprio said he was taking a break from acting. But it looks like The Wolf is back in the saddle, movie-wise. News recently broke that he’s planning to star in and produce “The Crowded Room,” about Billy Milligan, the first person to successfully use multiple personality disorder as a legal defense.


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