Morgan Hill renters desperate for a break, beware.
Scammers all over Santa Clara County are preying on people searching for low-priced rentals by hijacking legitimate home listings and advertising them online for a fraction of market value – and local real estate agents are warning people not to get snagged by this shady Internet trend.
The scam works like this: The con artist finds a real home for sale, copies the photos and description from the Realtor’s website, and posts the ad on websites such as Craigslist for a price that is too good to be true. The scammer is hoping to obtain personal information via a fake rental application, or better yet, a deposit.
“I had an open house on Saturday for a property for sale, and I had two families come and say, ‘I can’t believe this place is for rent for just $1,500 a month,’” said Carl San Miguel, president of the Santa Clara County Association of Realtors.
But in reality, the south San Jose house is listed for sale at $609,000.
San Miguel advised those families that had been duped “to call the District Attorney’s Office because they had been scammed.”
A typical rental in the Santa Clara County has jumped at least $300 in the past year, pushing a three-bedroom home to rent for a minimum of $2,000 a month, according to San Miguel. The spike in price was caused by the influx of former homeowners who lost their homes between 2008 and 2011 to foreclosure and are now in the rental market. The demand for rentals has caused a frenzy among those searching for affordable housing, San Miguel said, and has opened the door for others to take advantage of that desperation.
The problem is more prevalent in the big, impersonal cities of the Silicon Valley, but it’s happening in South County too, as several local Realtors can attest.
“I see it happen all the time,” said Michelle Montez of Intero Real Estate Services in Gilroy. “Because the market is so competitive, people are willing to do crazy things.”
Montez said she first started seeing the problem a few years ago during the foreclosure boom after the housing market crash in 2008.
Two years ago, it happened to one of her listings in rural Gilroy.
“I was going to advertise my listing on Craigslist, and when I went to do it, it told me that property was already posted. I went, ‘What?’” Montez exclaimed.
She notified Craigslist right away and they removed the post.
“Rent is going up, there is little vacancies, people are desperate to find something. So when you see something for rent and it’s in your price range, and you’ve been looking for months, you’re willing to do a lot to get that house,” Montez said.
So desperate, in fact, that some people have given personal information – or even a first month’s deposit – to lock in the rental, sight unseen.
Roger Malech of Intero Real Estate in Morgan Hill said one of his friends recently fell for the ploy. The family was looking to sell their house, move out of the area, and put their son up in a rental home in Campbell. They found one on Craigslist for a great price and put down a $1,900 deposit because the scammer said he was in England and would mail them the key after he received their deposit.
“It’s surprising to me that people fall for it. But I guess if one out of every 500 does, it’s worth it to the scammer. It’s just sad,” Malech said.
The duped party in this case happened to be a high-level CFO, Malech said.
“He wasn’t dumb, that’s for sure. Just trusting,” he said.
Malech on several occasions has caught scammers listing his properties, and only hopes no would-be renters fell prey to the ploy.
“I’ll have friends say to me, ‘Roger, I didn’t know your listing was for rent, too,’ and I know it’s happened again. It’s pretty rampant,” Malech said.
Cindy Dominguez of Coldwell Banker in Morgan Hill said that once in awhile, she’ll get a call to the office from someone confused about a certain property that was listed as a rental online, but a drive-by to the property revealed a for sale sign in the front lawn.
Dominquez recommends using a property manager to find a rental, or to put in a lot of research to vet out the area’s listings.
“Also, look in the newspaper. Because in the newspaper, it has to be pretty legitimate if it’s in there. Craigslist is great for a lot of stuff, but be very careful, and do your homework when using it to find a rental,” she warned.
When this reporter inquired about a San Jose listing on Craigslist – a Tudor style brick home with a large yard listed for $1,200 a month – a person with the email of [email protected] quickly responded.
“If you notice, you will discover that the price we are offering is far below standard price,” the email response read. “If you drive by the house you may see a sign there, you have nothing to worry about it belongs to my previous agent so you have absolutely nothing to worry about and you don’t have to call them because they do not have access to the house anymore.”
Craigslist did not respond to phone calls or emails regarding the issue.
Patty Filice of Intero Real Estate Services in Morgan Hill has had her listings hijacked by scammers three times in the past few years.
The first time, she chalked it up to a mistake. But the second time, she knew it was something more.
After a lull in these kinds of incidents since the foreclosure heyday, Filice said she has seen them on the rise again.
“I’m guessing it may be back because everyone is looking for rentals. They are difficult to find, and it’s really competitive out there. That lends itself to opportunities for others to scam,” she observed.
According to the real estate fraud unit of the District Attorney’s Office, this type of scam is on the rise. But the criminals are tough to track down because they don’t use a real name and use disposable cell phones that are hard to trace.
San Miguel encourages people to report their experiences with Craigslist scammers to local law enforcement – although he doubts the suspects will ever get caught.
“They work in the dark from a computer. It’s all Internet, all online. They could be from Nigeria. What can you do about that? The best thing to do is just educate the public,” he said.
Morgan Hill renters desperate for a break, beware.