For Sale By Owner Scam in Hawaii real estate

A customer contacted me today and asked if I could represent him in a For Sale By Owner (FSBO) purchase.  I said that would be fine.  He forwarded an e-mail with a link to a website listing. See the photo below.  I did not intentionally blur it, apparently that's what happens when a webpage is copied and pasted into another webpage.

Message from a person claiming to be the owner

The customer also included correspondence between himself and the "owner."  Here's what the "owner" said:
 

Hello,

This is not a leasehold, we recently moved in Europe/ Spain and we have no use of the condo so if you are interested we will need to settle an appointment, also if you could arrange a sales contract that we will sign before we arrive would be great because we will need a 3-5% down payment, refundable if you do not like the condo. Financing is possible, you do not need to find a financing option.  Maintenance fees aprox. 200/month, property tax 2200 / year.
Let me know.

Errors in the listing and in the scammer's e-mail

1. The phone number is fake.
2. Maintenance fees are $200 monthly according to the e-mail.  Actual maintenance fees are $630 per month.
3. Property tax is $2,200 per year according to the e-mail.   Actual taxes are $1,008 per year.  (Did you know that Hawaii has low real property tax rates?)
4. The e-mail says the property is not a leasehold.  Actually, the entire building is leasehold.

What's the angle?

Good question!  I'm not sure.  My best guess is that the scammer is trying to get somebody to send earnest money, possibly by cashier's check or via Western Union.  Once the scammer gets the money, his/her deal is done!

How to avoid FSBO scams

1. "If it looks too good to be true, it probably is too good to be true."
2. Be suspicious of listings with information that does not match that of other listings in the same building.
3. Watch out for people overseas claiming that they just want to get rid of their property.   Why wouldn't they list with a reputable realtor and get a better price?
4. If you do make a purchase in a FSBO, use a reputable local escrow company.  The escrow company will hold the buyer's funds and disburse them on the day the transaction records and ownership is transferred.
5. Have your realtor checkout a deal.  Compensation to your realtor must be arranged.  Frequently the owner is willing to pay a commission to a buyer's agent.   He's already cutting the commission in half by not listing!  If the seller won't pay a commission, the buyer can arrange to pay the realtor.  Alternatively, the buyer can hire a real estate attorney for representation.
6. Think about it - is it really worth it to buy a FSBO?  In my experience, many FSBO sellers have too high a price on their properties.  Check the MLS listings and see what's available first.

Aloha and happy house hunting!

Mike Bates Hawaii realtor

Follow up 6/13/08

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