Buying a home is exciting – you finally have a home, and a mailbox, of your very own! Now… the sale is public record, and that the mailbox will be filled with junk mail. While most junk mail looks harmless, there are mail scams for new home buyers that look like legitimate bills. Many pretend to come from government agencies. If you’re not careful, you can lose your money.
When you purchase or refinance a home, lots of facts become public record: your name, the date of the transaction, the loan company, the purchase price. A letter that pretends to come from a government agency can list all of these facts, but don’t let that fool you. If you receive any letter or invoice demanding payment, unless it is a legitimate mortgage or utility bill, it is very likely a mail scam.
Beware of these mail scams:
Homestead Mail Scams
One of the most common new home buyer mail scams is the Homestead Mail Scam. They often come with a “Document Package and Homestead Request Form,” and tell you that you must obtain a Declaration of Homestead. Some letters will state, “You have a legal right to protect the equity in your home.” They will tell you that a homestead protects you from involuntary liens.
The truth is that every homeowner has an automatic Homestead exemption. You do not need to file an additional document.
Property Tax – Homeowner Exemption Form
Another popular mail scam is the claim that you need to file a document for your homeowner’s property tax exemption. While this is actually true, there is absolutely no reason to pay anyone $89 to do it for you.
In San Diego County, the Assessor’s Office automatically sends their homeowner exemption form to a property anytime it is sold. (Or, you can just download it here.) Filing for the homeowner’s property tax exemption is completely free.
Keep in mind that these mail scams will claim that you haven’t filed it yet, or that you must do it by a fake deadline, or you risk losing lots of money. All these claims are lies to scare you into sending them money. They will usually invoice you a fee to receive the form, and then tell you to mail it back to them with a second fee in order to file it.
It seems criminal, doesn’t it? Well, it’s perfectly legal. But that doesn’t make it any less unethical.
Mortgage Life/Disability Insurance
While there isn’t anything unethical about disability insurance, these mail scams often falsely claim that these are required policies. I don’t like any junk mail that comes in the form of an invoice, that demands immediate payment.
Any insurance policy that is connected only to your mortgage is probably overpriced and unnecessary. Term life insurance and general disability insurance policies are usually much less expensive than mortgage life/disability insurance.
Grant Deed Copies
Grand Deed mail scams will send you an invoice for a copy of your grant deed. They may claim that you need a copy of your Current Grant Deed and Property Assessment Profile, and that these documents can provide evidence that your property was in fact transferred to you.
As if it’s difficult to prove who owns what property. Trust me, with all the documentation that takes place during a real estate transaction, there is no difficulty determining the legal owner of a property. When you purchase a home, your name is all over it.
Paying for a Grant Deed is completely unnecessary, as you will be automatically mailed a copy of your grant deed at no additional charge. You have already paid a recording fee within your closing costs. You don’t need to pay any more.
If you’re interested in obtaining a Property Assessment Profile, you never need to pay for it. Just contact me and I will send you one for free.
If for whatever reason you want additional official copies of your Grant Deed, go directly to your County Assessor’s Office and request them. The fee will be much less expensive than whatever these scams demand. (I personally can’t think of a reason why anyone would need an official copy of their Grant Deed. If you want just a regular copy, I can probably obtain one for you – just contact me with the property address and your e-mail.)
Mortgage Payment Scams
Unlike the other scams, this one is most certainly illegal. You will receive a letter claiming that your mortgage has been sold to another company, and that you need to send your mortgage payments to XYZ Company.
Can you imagine accidentally sending thousands of dollars to some random company that pretends to be your lender?
While mortgages are routinely sold, do not trust a letter you receive in the mail. If you ever receive a notification of a new payee, call your mortgage company directly to verify.
Home Warranty Mail Scams
Home Warranty mail scams send you invoices to extend or create a new home warranty policy.
Most home buyers in San Diego County receive a one-year home warranty, paid by the Seller. These can be helpful if any major appliances fail in the first year. Home warranties usually aren’t worth extending or renewing, however. They are a very expensive form of insurance. You’re likely better off saving a little every month for home maintenance and repairs.
The Bottom Line
When you purchase or refinance a home, there will be unscrupulous people out there who will try to take advantage of you. Home buyers have just paid numerous fees for services, and it’s easy to think that there’s just one more fee to pay. Well, there almost always isn’t.
Many home buyers, at least in San Diego County, will receive a Supplemental Tax Bill. This is one of the few pieces of mail you do NOT want to throw away! However, you can always check its validity on the County Assessor’s website.
I invite my clients to contact me and send me any mail that looks suspicious. Be vigilant, and verify any invoices before paying them. Just because they come from a “Local Records Office” or they tell you that you “need to protect your investment,” doesn’t mean they’re legitimate. They likely aren’t.