How to Avoid Scammers!

Door-to-Door Service Contracts and Products

How it Works: The door-to-door contracts scheme begins when a ‘groomer’ shows up at a home making false promises, offering rebates or playing on the fears of an older homeowner. They use slick presentations and high-pressure sales tactics to coerce the homeowner to agree to overpriced, multi-year rental contracts registered on the home’s title or funded via high-interest mortgages. The services offered don’t align with the homeowner’s real needs; sometimes, the product or service doesn’t even exist! Some of you may have seen CBC’s Marketplace report on door to door HVAC contracts and how they were ripping off seniors by playing on their fears and uncertainty.

Avoidance Tips:

Ontario made door-to-door sales of HVAC systems illegal in 2018, so if someone shows up at your door and wants to discuss your heating/cooling system, water heater, etc., they are almost certainly scammers.

Don’t feel pressure to agree to or sign anything on the spot – make sure you read and understand any contract completely before signing it

Ask lots of questions

If your spidey senses tingle, ask a trusted friend or family member for their opinion

Be suspicious of the motives of anyone who shows up at your door uninvited (and yes, that includes real estate agents!)

Reverse Mortgage Scams

How it Works: Reverse mortgages allow homeowners to borrow money from the equity in their home, without having to sell it or make repayments until the homeowner moves out of the home, sells it or dies. While there are legitimate reverse mortgage companies in Ontario, there are also those looking to take advantage of seniors who need cash. Scammers offer fake reverse mortgage deals, promising cash in exchange for equity. Victims may end up losing their homes or equity.

How to Avoid:

Choose your reverse mortgage provider carefully. Ask friends for referrals and read online reviews.

Be suspicious if someone reaches out to you offering a reverse mortgage; only deal with companies you research and contact.

Be wary of reverse mortgage companies that want you to transfer title (that’s not required and NEVER do that) or ask for sensitive financial information.

Don’t pay upfront fees for information or applications.

Title Fraud

How it Works: Title fraud is one of the most common real estate scams among seniors in Canada and involves the transfer of the title to your property to someone else without your knowledge or consent. This happened to a family member of a client of mine, and I discussed that specific scenario in a previous newsletter. It usually works in one of the following ways:

1 – Scammers use stolen or fake ID to pose as legitimate homeowners, taking out one or more mortgages on a property and pocketing the mortgage money, leaving the real homeowner with a mortgage they don’t even know about.

2 – Scammers register forged documents, allowing them to discharge any existing mortgages and transfer the property to themselves, register a new mortgage and take the money.

Avoidance Tips:

Safeguard your personal documents and secure your property records

Don’t give out personal information on the phone, through mail or online, unless you know the person you’re giving it to. Avoid giving out your social insurance number (SIN).

Don’t sign any document that you don’t fully read and understand

Periodically, check the provincial land registry office to ensure the title of your home is still in your name (I can do this for you if you like, just reach out and I would be happy to help).

Review your credit report every year to ensure there are no discrepancies. You can check your credit score with Equifax or TransUnion Canada. Its free to pull your own credit record.

Watch your mail – Identify theft often starts when a fraudster redirects your mail and gets access to your personal information, so make sure to remove mail from your mailbox, pay attention to missing bills or mail and make sure to forward mail when you move.

Consider purchasing title insurance

Home Improvement Scams

How it Works: Unfortunately this is an all too-common scam, shoddy home professionals promise home improvements but either don’t complete the work or overcharge for shoddy repairs. Mike Holmes built an entire show on fixing a home when this happens.

Another home improvement fraud, the scammers show up at your door and tell you that you need emergency repairs – they’ll try to frighten you about a gas leak or other hazard and pressure you to hire them on the spot. The scammers then place a Lien on your property without your knowledge, binding you to a contract you must pay before you can sell or refinance your home.

Avoidance Tips:

When hiring a home services professional, get multiple quotes. Ask friends and family for referrals and read online reviews. Most importantly, never pay a contractor in advance.

If you need any type of work done around your home, I have a list of local reputable contractors and professionals. Reach out and I can connect you with what you need.

Be very cautious if someone shows up at your door uninvited and offers home services. Don’t give out any personal information, don’t sign any contracts and don’t give them any money. If you are, in fact, interested in what they are offering, ask for their contact information and tell them you’ll be in touch – then research the person and company online and ask a trusted friend or family member for a second opinion.

‘I Have a Buyer For Your House’ Scams

How it Works: Unscrupulous investors sometimes send letters to seniors, offering to buy their home without the hassles or expenses of listing it for sale. The letters appears to be handwritten and personal – but they are, in fact, sent to thousands of other homeowners. Make no mistake about it – they want to buy your home for less money than it’s worth (sometimes hundreds of thousands less).

What sellers in this scenario will mostly experience is their home is bought by one of this “we buy houses” companies for a below market price. Then a couple weeks later the home gets re-listed for sale by the new owners for usually $100k - $300k+ more than it was bought for. Sure, the homeowner saved on commission…but it could cost them a quarter of a million dollars…or more!

Unfortunately, we sometimes see the ‘I Have a Buyer For Your House’ tactic used by shady real estate sales agents too: they send a flyer or show up at your door unannounced, tell you they have a buyer for your home and proceed to get you to sign a listing agreement. There isn’t usually a real buyer – this is just a way for them to build their business. If you want to sell your house, you’d be better served by hiring a top-rated agent who won’t use deception as a means of building a relationship with you. A good relationship is not built on a lie.

Avoiding It:

Throw out those letters! Trust me, it’s not the way to maximize the price of your home.

Don’t sign a listing agreement without taking the time to research the agent, the value of your home and your goals. If it seems too good to be true…well…you know the rest.

High-Pressure Sales Tactics

How it Works: Beware the questionable home service professionals and REALTORS who use high-pressure tactics, often playing on emotions, to force seniors into quick decisions.

Avoidance Tips: Take your time, consult with trusted advisors, and never rush into agreements under pressure.

Summary Tips for Avoiding Real Estate Scams:

Verify Professionals: Work only with licensed, reputable real estate agents, lenders, and inspectors.

Seek Legal Counsel: Consult with a lawyer experienced in real estate matters before making significant decisions.

Research Extensively: Investigate any offer, company, or individual thoroughly, and don’t be afraid to ask questions.

Protect Personal Information: Never share sensitive personal or financial details over the phone or email.

Read Contracts Carefully: Review all contracts and documents meticulously before signing, seeking legal advice if necessary.

Stay Informed: Keep abreast of common scams and educate yourself on recognizing and avoiding them.

Trust Your Instincts: If an offer seems too good to be true or feels suspicious, trust your gut instinct, and proceed with caution.

If you don’t have any close family or friends near by and you are wondering if something is too good to be true, reach out and I would be happy to lend a hand.

As we get older, we will all go through the need to renovate/repair your home, downsize or even selling our home. Unfortunately, scammers see these as opportunities to exploit people, especially seniors. Real estate scams targeting older adults are on the rise, but with the right knowledge and precautions, you can protect yourself and your home. This month I will cover some of the more prevalent scams and what you can do to protect yourself and your home. Lets jump right into it.