Real estate fraud scheme highlights the importance of choosing the right realtor

Grace Lieberman

By Grace Lieberman / NewsBreak Pinal County, AZ

Last week, a former Pinal County real estate agent was sentenced to almost four years in prison for defrauding an acquaintance with a fake real estate investment.

Sarah Nicole Kelley of Coolidge was found guilty of scamming two family friends. In 2017, she took $55,000 from one in a Pinal County real estate investment and another $130,000 claiming it was to help save her sister’s home from foreclosure. She also defrauded another family friend out of $647,000 in a similar way.

The case brings to light the dangers of real estate investment scams. Although there is a risk of being duped by someone you think you can trust, according to the Federal Trade Commission, other methods are more common.

Here’s some ways to spot a real estate investment scam, and avoid it.

According to the FTC, one of the most common real estate investment scams are seminars. They promote “risk-free” training or coaching services, and often make grand promises about how much money you could make.

Organizers will promise get-rich-quick schemes with guaranteed success. These kinds of events often trick attendees to pay thousands to buy into a plan that won’t pay off.

The FTC says, “Don’t be convinced by ads with success stories of people saying how much money they made with little time, effort, and risk,” as they’re often false testimonies.

Another common scam relates to rental properties. Experts say that if an owner doesn’t want to meet in person, wants you to sign an agreement or pay a deposit before visiting the property, or the price is too good to be true, it’s highly likely to be fraudulent.

Avoiding and reporting scams

The best way to avoid getting fooled is to thoroughly vet any professional you’re working with. Only seek investment property financing from a trusted lender.

When working with a realtor or lender, be sure to get trusted references and do some online searching on the person. Also make sure they give you an up front quote for their services.

If you think you found a scam, the FTC recommends reporting it through their portal.

An overarching theme of all scams is that if it sounds too good to be true, it probably is. Avoid people who pressure you into giving money fast and always do your research.

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Grace Lieberman is a business, science and technology reporter based in Phoenix, AZ

Phoenix, AZ

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