Housing Scams and How to Avoid Them
The information on this page is not copyrighted and users are free to share, copy, and distribute as needed. We hope the information provided here will help prevent you or someone you know from getting scammed during their housing search.
Ethan with North Berkeley Properties is a former UC Berkeley student and local resident of Berkeley that has worked with North Berkeley Properties for 10+ years. The information provided below is from his personal experience from apartment hunting in Berkeley, encounters on public sites, and from talking to past/current residents. The information below is provided as commentary for educational purposes only.
Why are Housing Scams so Prevalent?
One of the reasons may be due to the fact that Berkeley has a high rate of housing turnover due to its proximity to UC Berkeley, Berkeley City College, Lawrence Berkeley Lab, etc. Every year, campus affiliates and visitors (students, faculty, staff, etc.) migrate to and from the area and may be in need of housing. Because of this influx, there are many first time apartment hunters that may be unfamiliar with local housing scams.
Some apartment renters are also doing their search from abroad and may not be able to look at housing in-person and may need to rent a unit without dealing locally. During COVID, this has made things even more difficult with travel bans and public health concerns preventing in-person visits.
Scammers themselves may operate overseas and are hard to prosecute because of this. Sadly, the scams actually work and some people become an unfortunate victim. As long as there is money to be made scammers will keep looking for future victims.
How Do Housing Scams Work?
Housing scams typically rely on a scammer posting a fake housing listing, enticing a would be victim, and then receiving money before disappearing. Housing scams usually occur online through various sites. Many people can be wary of Craigslist due to the site’s association with fake ads or scams but the same fraudulent listings can also appear on other sites like Facebook, Zillow.com or anything that requires an email account to post an ad. Because fraudulent listings can occur on any site it’s important for applicants to be cautious during their housing search.
The Roommate / Sublet Scam: Another play on the housing scam targets apartment residents already living in housing but may be looking for a roommate or temporary sublet. This scam typically involves a person responding to a posted ad saying they are interested in renting your room or apartment sublet. The scammer is typically not in the area and says they will rent immediately and send a check or payment. A check that looks real will be sent to the victim for an amount that is higher than agreed to. The scammer will then claim this is a mistake and ask the roommate / victim to wire the money back to them and rush this process claiming financial hardship. The victim wiring money to the scammer then finds out the deposited check is fake and bounces – leaving their account minus the funds of the original check and the wired money to the scammer lost.
To avoid this roommate scam – just don’t cash the check – offer to mail it back to the sender so they can correct the mistake and say it’s already “in the mail”. If they are a scammer they will pretend to be upset and then disappear.
Further Reading on Fake Check Scams: FTC Consumer Information (new tab)
How to Identify Suspicious Housing Ads?
Fraudulent ads are usually ‘too good to be true’. The unit typically fits all the amenities / categories at a bargain price in order to appeal to most apartment hunters and bring in potential victims:
- Pets allowed
- Month to month or short term
- Parking included
- All utilities included
- Wi-fi included
- Newly renovated / modern photos
- Fully furnished
- Air conditioning
- Washer / dryer in-unit
Now it’s true that some (more modern) units in Berkeley will have all the amenities above but the price will usually be market rate. For a 1-bedroom in a newly built building this can be $2500-3500. Furnished private rooms may go for $1000-1800. Suspicious listings may advertise a unit with all the above features but at a below market rate of $1200-1500 (1-bedroom), $500-800 for furnished private room.
Scammers may steal ads posted elsewhere on other legitimate sites. Things to be suspicious of:
- Look for electrical outlets or fixtures that are not common in the USA. Some fake listings are taken from international apartment listings with foreign outlets, amenities, etc.
- Be suspicious of odd amenities included (eg: one suspicious housing ad said the apartment comes with hurricane shutters – why would a home in Berkeley need hurricane protection?)
- Look for images stolen from the MLS (Multiple Listing Service). The MLS is where realtors frequently list images of homes/condos online for potential buyers. MLS-images are usually watermarked in the corner. Scammers will take these photos and photoshop a text box over the MLS logo.
- Be suspicious of bad grammar, misspellings, etc. in the advertisement. Someone advertising a luxury unit is going to take the time to read/review their ad. Scammers have used terms like “Inbox me”, “security is intact”, “close position to bus depot”, etc.
How Do Scammers Usually Communicate?
If responding to a public post (eg: Facebook) suspicious ads that are possible scams tend to have the same theme. The possible scammer usually says “DM me” to avoid chatting in a public area and avoid comments from others advising that their tactics may be a scam.
When potential victims reach out to the scammer an excuse will always follow on why the unit cannot be shown in person or why the address won’t be disclosed. Reasons a scammer / fake owner give include that they are:
- A teacher, priest, relief worker, COVID nurse, or some other profession that requires them to be overseas or out of the area.
- Afraid of disclosing address since the property will be vandalized
- Even bizarre stories of the owner is out of the area but will ask the applicant to contact their janitor to show the unit. But the janitor just flew to Kentucky to clean another unit and also happens to be out of town during COVID restrictions! – true scam (see images later)
Scammers basically do not want to meet with you in-person or talk to you over the phone verbally or via video chat / face time. They primarily wish to correspond only via email or text message. The messages can be grammatically odd or use strange wording as a result of overseas scammers using translation software.
After claiming that they cannot show you the unit the scammer will then demand money to hold the unit or to sign a lease. They will create pressure saying you won’t get the unit and that someone else will unless you pay.
Scammers will say they will mail you the keys or meet with you on the day to move-in but they will never show up.
Scammers may also use odd leasing documents or accept applications via text message. See images below for examples.
How Do Scammers Gain Your Trust?
Scammers will sometimes scan a copy of their “ID” to you in order to gain your trust and/or sometimes produce phony forms that says they are the owner of a property or are licensed.
Some of these phony documents are simple printed out sheets that say “Certificate of Ownership” or “Landlord License”. In California real estate there is no such document called a certificate of ownership and most owners do not have a landlord license. See images of phony documents below.
The real document for proving property ownership in California is called a Grant Deed and is often notarized and nearly always recorded with the local County Assessor’s Office. However, note that most owners will never show you this document and it is rare for applicants to demand to see it.
There is no license required for owning property. Most individual owners of property that self-manage their house / unit do not have any licensing requirement. There is a licensing requirement for property management companies and brokers / agents in California. This is typically referred to as a real estate license and issued by California’s Department of Real Estate.
How Do Scammers Receive Money?
Scammers want to receive money as funds that cannot be disputed or refunded back. Because of this scammers request money via electronic wiring or direct ‘peer to peer’ payments. Many people may associate scams with Western Union or other wire transfers.
However, scams may also utilize other payment methods like Zelle and Venmo. These are NOT secured transactions that can be disputed and are to be treated as directly sending someone cash. Once it’s sent the money is gone.
There is a common misconception that consumers using Zelle through their own banking institution (Wells Fargo, Chase, etc.) can dispute fraudulent transactions and receive a refund. This is incorrect and listed in the ‘fine print’ of the terms and conditions. Zelle has a form to report fraud but notes that you may not receive your money back.
Further Reading About Zelle:
How Do I Avoid Becoming a Victim?
- Deal locally / in-person. Remember – scammers don’t want to meet you face to face so they will always avoid this. If you are searching for housing remotely or from abroad don’t disclose this information upfront as you may become an easy victim for a scammer. Instead, ask if you can have a friend or relative view the apartment for you on your behalf (even if this is not true). A real landlord or owner will most often say ‘yes’ and offer a tour if they have the time.
- Pay by check / card. Consumer protections exist for most credit / debit card transactions or by check (inquire with your financial institution). Nearly all property managers or landlords will accept some sort of bank check – personal, certified, etc. and agree to meet you to collect it or agree to have it mailed. Scammers always want their money payment to be untraceable and non-refundable. Larger companies or firms may utilize payments through property management software – eg: AppFolio, PropertyWare, Matrix, Yardi, etc.
- Verify the listing address. Fake listings often do not exist at all. Do a basic Google Maps search and see if it shows up. Rent controlled units in Berkeley show up online in a City database: Rent Board Search However, newer buildings, condos, single family homes, etc. may not show up in the rent board database so this search may be limited. A basic Google Search may still turn up the address and you may find old postings for the same apartment that are listed at a different price. Scammers frequently use old listings.
- Avoid high pressure sales tactics. Scammers often demand that you immediately pay them without seeing the unit or receiving the lease and say they have others wanting to rent the same unit. Do not send large sums of money to anyone in order to see a unit or apply for it. Most landlords / agents will allow you to ask questions, view the unit, read the lease, etc. before requiring the security deposit.
- Ask some test or detailed questions about the unit, application, move-in process, living in the unit, etc. Scammers do not want to take the time to answer a bunch of questions about a fake unit and how to pick up keys, how repairs are handled, etc. since they probably have no idea and don’t want to spend time answering these questions since they just want your money. They will either end communication, ignore these questions, or answer with strange grammar.
- Ask for a second opinion. Sometimes it helps to ask a friend or relative about the same rental listing. They may have reservations or suspicions about it that you may not. Remember, if an apartment listing is too good to be true it often is. Even better, the same friend can ask the suspicious person if they will rent to them if they have a bankruptcy, eviction on record, and would like to put 5-people in the 1-bedroom listed for rent. Someone actually asked a scammer this and the scammer responded back saying “yes”.
Examples of Suspicious Listings
^^ Suspicious ad and FB profile – most fraudulent FB ads seem to follow the same similar theme beginning with: a greeting, ‘Hello Everyone’ then saying it’s furnished and beautiful unit (with no pics provided), at a low price and with no address / location provided. Note that when someone asked for the address the possible scammer just says to ‘DM me’ and wants to avoid chatting in public.
^^ ‘Application’ provided as a text message. Suspicious red flag to be wary of. Most property managers / landlords will have a proper form for renting a unit. Odd grammar and misspellings (eg: ‘proffession’, ‘how long do you intend staying’).
^ Note the amenities included and the substantially below market rate. Also lack of pics, address, etc. Strange grammar “close position to bus station”, “inbox me”, “privately kitchen”.
^ Again, another advertisement that seems to good to be true. In this case the listing photos show the MLS logo on the upper corner indicating that they were taken from a realtor. The address for the building (Mark Twain Building) on College Avenue is a real location in Berkeley and has condos. The scam ad likely stole a previous condo sale listing for the building.
^ Example of picture taken from a suspicious advertisement. Note the text box ‘Furnished 1BR Berkeley’ is covering up the MLS logo. Sometimes you can right click the image and select ‘search Google for Image’ and do a reverse search. Google can sometimes show where the images were potentially taken from (not always possible)
^^ Example of a scam ad where pictures were successfully located via Google’s reverse image search. Scammer took images from a corporate rental located in Pasadena, California.
^^ Potential scam involving an out of the area owner that will have their ‘janitor’ show the unit. Oops! The janitor happens to be Kentucky and unable to come back to Berkeley to show the unit
^^ Scammer attempting to gain your trust by providing a photo ID and fake Certificate of Ownership. Note that ‘Carl’ may actually be a real person in the US and may be an actual ID-theft victim from another scam. Other internet scams require you to send your ID and picture of yourself to buy fake items like cars that will ship to you. Scammers have been known to steal money and identities at the same time.
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Whether or not you rent an apartment from North Berkeley Properties we hope this information can be of use to you or someone you know. Every year we encounter or hear stories of online housing scam victims. Please be vigilant!