As a one-year-old, my son used to carefully sniff, then slowly shake any baby bottle that anyone but me handed him before he drank it. Like me, he’s a natural skeptic.
When it comes to apartment hunting, I don’t trust slick advertising or flawless apartment staging. And yet I’ve fallen for every scammer’s greatest hits:
- Moving into an illegal apartment with no heating system in the winter (despite paying for heat).
- Renting an apartment with a roommate who charged three times the actual rent for my share.
- Leasing an apartment from a guy who was housesitting.
- Did I mention the landlord with the hidden camera inside the house who was filming me and printing the photos as keepsakes?
You name it, I survived it. Fortunately, I landed in a fantastic apartment in a neighborhood that I love for a great price–despite hunting for an apartment during a pandemic. If you’re thinking about moving, read on for some sober advice, some hilarious stories, and my best tips to avoid getting swindled.
Should I Stay or Should I Go? Why and When Moving During a Pandemic Makes Sense
During a crisis, everyone wants to head for the hills (sometimes literally!) but it is important to not flee uncertainty for a remedy that won’t work. While some states initiated a moratorium on evictions and foreclosures during the early days of the pandemic, many of those mandated pauses in rent and mortgage enforcement are coming to an end. Now some tenants (and even homeowners) are looking for new homes. Here are some questions to ask if you’re thinking about moving:
- Is this a “pandemic breakup” or have you really fallen out of love with your city? When things get better, will you miss living in your current city?
- Are pastures really that much greener somewhere else? How much cheaper are rents where you’re looking? (Check out our guide for the 10 most affordable cities for renters). What about job opportunities and salaries? If you are lucky enough to have a job, is telework an option (and for how long)?
- How will this affect my budget? Break out your spreadsheet or your favorite budgeting app like Personal Capital. Use their cash flow analyzer to see how lower rent would impact your bottom line.
- Are you a committed townie? Look into sublet options before letting go of a prized lease. Medical professionals from out of town and other essential workers may happily take over your lease for a short time, allowing you to remain the leaseholder.
- Are you willing to make a permanent move but are not sure about signing a long-lease in an unfamiliar city? Look for a month-to-month arrangements with the option to renew.
- Are you moving within your city? Landlords are suffering too and are looking for reliable tenants. Prove you are one and you may find a fantastic deal (just make sure it’s not too good to be true).
Ready to make the leap? Make sure you don’t fall into any traps.
The Best True Stories About the Worst Real Estate Scams
If you’re like me, you don’t buy those glossy photos of new apartments any more than those late-night “lose 20 pounds with one weird trick” ads online. That’s a good thing, right?
Turns out, that makes us a prime target for scammers. Why? Because sophisticated renters don’t just think they’re financially savvy, they know it. That confidence means that once we’ve convinced ourselves that the deal is a good one, it’s difficult to change our minds.
So what are the most common scams?
Scam #1: The Nice Guy
Signature Line: “I like you, you seem like a good, hardworking person, I’ll waive the broker’s fee if you pay the security deposit in cash.”
Profile: They are well-dressed, articulate, and usually carry a large manila folder full of renter applications and printouts of other exciting-looking apartments. Charming and helpful, they’ll tell you how they’ve helped other renters find great apartments and offer to help with movers, setting up utilities, and the like. Inevitably, they won’t have a business card (they ran out) or be able to show you a website with their name and their brokerage’s license number clearly visible (the website is down, they just started).
Who would fall for this? I did.
Here’s how it works:
You Meet the Agent.
An “agent” will show you a fantastic apartment. This is not their “listing,” they might say, they’re showing it for the landlord, a good friend. They might have a business card, but the card won’t have the real estate salesperson license number. If it has an address, it will be to a P.O. Box or a co-working office with an impossibly posh address.
This Place is Gorgeous, you’ll say!
You’ll fall in love with the apartment. It will be perfect in every way. The furniture and the staging will look like a cover of DWELL. The agent will quote you a price that is suspiciously low but then tell you that “the condo board” or “the landlord” has fees that are through the roof.
You’ll be crushed, and as you sigh and tell him that the price is about $1,000 over your hard limit, he will smile and nod, commenting on the economy and how everyone is struggling–even his friend the landlord. Since you, you good, hardworking person, are so very nice, he will cut you a deal.
He will let you take this amazing lease but only if you are willing to pay part of the sum in cash. That will allow him to pay the landlord a security deposit (or homeowner association fee) in cash and this will make him more agreeable to letting you take over this fantastic place despite your lack of funds, credit, freelancer’s income, etc., etc. He may, at this point, produce a set of keys for dramatic effect.
I’ll Take It!
If you are exhausted and desperate for a new apartment, you might consider Mr. Nice Guy’s offer. I mean, there’s a cute square business card, the apartment smells like lavender, and it’s 60% below the market price. And The Divinyls still live nearby!
As I headed out to go to the ATM with the “realtor,” I called my best friend who suggested that she take a look before I signed anything. Signed? I’d forgotten about that. I was holding keys that supposedly would launch my Barbie-Dream-House-Fantasy-Life where I hung out with rock stars and drank endless Papaya Smoothies – I’d forgotten about paperwork.
“Wait,” I said, hesitating. “Don’t I need to sign a lease?” His face, which had been all smiles, turned menacing. “Look, I’m doing you a favor. I’ll get you it in writing but that will take time. You want it or not?”
He paused to take an imaginary call. I stared at the ATM and then at the elderly punk couple with matching faux-hawks toddling down the street with a dyed-pink dog. The neighborhood was wicked cool, but somehow it seemed too good to be true. How could I rent an MTV Cribs-worthy apartment so easily?
Being 19 and desperate to have my own place, I shrugged off that nagging feeling that something wasn’t right, telling my friend on the phone that I was at our favorite pizza place on St. Marks Place pulling out money from the ATM and that everything was fine. “Stay where you are! Don’t take out the money!” she screamed and hung up.
Wondering why she was so upset, I canceled my ATM transaction. “My friend wants to see the place,” I told him. He rolled his eyes, “Sure, but we need to finish this today.”
Within minutes my friend and her boyfriend were jogging towards us down St. Marks. Who are those people?“ Mr. Nice Guy asked. “My best friend and her boyfriend, he works at a law office around the corner actually. She must have picked him up from work.”
The agent looked crestfallen, stood up abruptly, grabbed his briefcase, and ran down the street, hailing and jumping in a cab in less than a minute. “What the?”
My friend, breathless, grabbed me by the arm. “Did he get the money?” “No. You just hung up and I didn’t know what to think!”
“Thank God! Never ever pay in cash!” she said.
Did you catch the red flags in that scenario?
OK, this may seem like an easy one to suss out as a scam. However, if you were a 19-year-old student like I was, navigating an unfamiliar city with nothing but your Blondie t-shirt (to look like a “native New Yorker”) and a huge vintage purse you borrowed from your mom (to look “professional”), you might have fallen for this scam too. Let’s go through the red flags one by one.
Red Flag #1 – Bonafide
Legitimate real estate agents have real business cards with verifiable professional license numbers proudly displayed. They have offices. If they work at a co-working space they will do their darnedest to show you evidence that they are a part of an established business. That means a functional website, a phone service, and at least one or two references from other business owners.
What an authentic real estate agent won’t do is bristle when you need proof of their professional status. If they are the “friend” of the landlord, the landlord would want to meet you virtually before agreeing to let you move in. They would want to show you papers affirming their right to sublet the apartment, just in case you feel uncomfortable and decide to complain to the city (which you can do, FYI, by calling 311 if you are in New York).
Red Flag #2 – A perfect deal
There are no perfect deals. You’re not going to find a flawless apartment for almost nothing, even in a pandemic. That’s because there is a financial risk for the landlord anytime they rent to a tenant. Evictions can be expensive. Damages can run into the tens of thousands of dollars.
It is safer to simply leave the apartment vacant rather than to rent at a rate far below the market price. Be wary of deals that are so fantastic they don’t make financial sense for the landlord.
My current apartment was a great deal, but it is only about 30% below the normal rate. I got a deal on furnishings and services and that added to the benefit, but I would have turned on my heels if it was the same price as a youth hostel.
Red Flag #3 – Wants cash
Legitimate real estate agents, landlords, and building managers will not take your cash. They’ll send you to the corner check-cashing store to get a money order. They’ll help you set up PayPal on your phone. They’ll call your Aunt Luisa overseas to ask for a wire transfer on their Skype with you, but they won’t take your bills.
Why? Because it’s untraceable. If you end up in court over a lease dispute, there’s no electronic trail to prove that they are in the right. Electronic payments allow you to show that you were where you say you were, paying or receiving a payment. Why would you want it any other way?
Do you know who will take your cash? People who would never take you to court because they plan to get out of town as soon as possible, using your money.
Red Flag #4 – Forgetting the paperwork
No real estate professional “forgets” anything when it comes to money. They have to produce records of every transaction. They won’t just offer you an apartment on the spot without getting some proof that you are who you say you are. They’ll have all of the terms written out in detail and they will want your signature on each document before any money changes hands.
Scam #2: The Mean Guy
Signature Line: “Everybody wants to get into this building. I mean, I need to really pull some strings to get you in here.”
Profile: This Oscar-worthy scammer has watched Ocean’s Eleven one too many times and has been inspired to victimize regular folks rather than billionaires. Their goal is to steal your identity or deposit (or both) while renting a property as long-term when it is actually short term or isn’t for rent at all. Mr. Mean Guy usually has a quick turnaround agenda.
Here’s how it works:
You Meet the Agent – and You’re Not Alone
Mr. Mean Guy’s job is to make you feel lucky and unworthy of the great apartment in front of you. You may feel a need to prove yourself – he’ll play off this by bringing several people (often friends) to walk through the apartment and comment on how great it is. They normally have lease documents in hand with checks ready to hand over. Mr. Mean Guy often plays the role of a cousin or close friend of the landlord in this Oceans knock-off.
More than a decade after my first encounter with an all-cash scam, the “mean guy” probably didn’t even know who owned the apartment. All he knew was that the real owners were away (an accomplice gave him access) and he saw a chance to reel in tens of thousands of dollars over a few days.
He’s a Bit Too Eager
Electronic payment? Sure! He was sophisticated enough to have a PayPal account set up, but he refused to text it or email it to me. Immediately, my scam-radar dinged.
He demanded my ID (which I brought) but said he needed to take my license, social security card, and bank card with him to his office to make a copy. I laughed out loud and said I would make him a copy of my license at the deli on the corner. Frowning, he walked away to chat with the other couple who were looking around. They spoke in hushed tones.
He came back with “good news.” They needed more room for their sick granny to stay with them, so I could take the place today. Older and wiser, I balked at the $8k lump sum payment that he wanted up front, but he kept insisting. “I mean this is a three-bedroom apartment, at this price? Whaddaya nuts? Our minimum income normally is high-high six figures! I wanna help you, but you’re makin’ this real tough.”
Sure was! I asked him to visit him at his office (as I “forgot” my checkbook) and he said it was under construction. I left, telling him I would think about it. I called him from my Uber and asked him for his real estate brokerage number and he hung up on me. A few weeks later, I saw him on television, not advertising, but as a scam artist stealing deposits from unsuspecting potential renters.
Red Flag #1 – Doesn’t want electronic records
Notice how this agent wouldn’t email or text me his PayPal account? If he had texted me, I could prove that the phone number was connected to any payment that I made. He didn’t want that.
Red Flag #2 – Wants to take my ID
NEVER give your ID, social security card, bank card, or other ID/banking information to someone. This is a huge red flag. While often agents will need a copy of some of this information, make sure it stays in your eye-line.
Red Flag #3 – Suddenly it is immediately available
Landlords normally know when things are going to be available. Sure, there can be some last-minute changes, but while I’m literally talking to him? If it seems fishy, that’s probably because it is fishy.
How to Avoid Scammers
While your house-hunting experience may not be an episode of CSI, you’ll still want to follow my tips to avoid the pitfalls that I fell headlong into.
Tip #1 – Verify everything
Every major city has an online directory listing the legal ownership of properties by zip code. You can easily find out if the lease you are reading is legal and binding to the appropriate parties.
The same goes for real estate agents. You can check to see if Mr. Nice Guy is an actual licensed professional by searching for his name on any “public license search” website–it should end with .gov.
Tip #2 – Don’t pay cash
There are so many ways to pay electronically that it is ridiculous to insist on cash payment. If a “landlord” or “agent” insists on cash in hand it is likely that there is an unsavory reason behind it.
Related: Best Payment Apps
Tip #3 – Be patient
I spent months looking for my new apartment. I made myself look away when I saw something that was a great deal but didn’t have the features that mattered to me – safety, a brand new interior, convenient to public transportation, and walking distance to a good-sized park.
I researched and spoke with real estate agents for months, almost daily, until I found my place. I viewed it virtually because of pandemic restrictions. I paid for a “trial week” to make sure it was livable since a video is not the same as living there.
Look for value but not a “steal.” Landlords are actively looking for good tenants and that means scammers will be out in force attempting to take advantage of bargain hunters.