Essential Safety Guidelines for Real Estate Transactions
Knowledge is your best defense. Review these important safety measures to protect yourself and your investments.
For lenders: Never send funds directly to a borrower's personal or business bank account. For borrowers: No legitimate lender will ask you to wire money directly to them.
All legitimate real estate transactions involve neutral third parties like title companies or closing attorneys. If someone is pressuring you to skip this step, it's a red flag.
All funds must go through a licensed title company or closing attorney. No exceptions. This protects both parties and ensures proper documentation and legal compliance.
Keep documentation of every transaction. Receipts, wire confirmations, and closing statements are your proof of payment and protect you in case of disputes.
If something seems unusually cheap or the returns seem impossibly high, investigate thoroughly. There's usually a catch—hidden repairs, title issues, or worse.
Ensure all terms and conditions are documented in a formal promissory note. This legally binding document protects both lender and borrower by clearly defining repayment terms.
Protect your investment with a recorded mortgage so the property cannot be sold or refinanced without your approval. This gives you a legal claim to the property.
Make sure you're listed as a beneficiary or loss payee on all relevant insurance policies (builder's risk, lender policy, landlord policy). This protects your investment if something goes wrong.
Never sign documents that give someone else permission to move your money without your explicit consent. Take time to review all contracts and ask questions if anything is unclear.
If something goes wrong with the property title, file a claim through your title policy to see if your loss is covered. Title insurance exists to protect you from hidden defects.
This is so important we're saying it twice. Always use a title company or closing attorney for all fund transfers. This single rule prevents the majority of real estate fraud.
This single rule prevents the majority of real estate fraud. A licensed title company or closing attorney acts as a neutral third party, ensuring all funds are handled properly and all legal requirements are met.
If someone asks you to skip this step, walk away immediately.
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