Fraud: What is it? Real estate license exam questions.

Fraud can be described as many things. Typically fraud is intended deception to result in financial or personal gain. In real estate, fraud can occur at many points during a transaction. As a buyer, seller, or agent, its essential to understand fraud and how to avoid it. What is Fraud? Definition: Fraud is the act of intentionally deceiving another party for financial or personal gain. Example: An example would be if you tell a client a property is 5,000 square feet when you know it is only 3,000 square feet. That is fraud. Fraud occurs more often than you may think. Typically fraud contains an element of intent; for example, one agent may try to manipulate a buyer to make a sale, or one agent may try to manipulate a buyer to increase the asking price. It’s all about the intent. What are the Different Types of Fraud? Fraud can be split into different sections and types. While we already defined the general term for fraud it’s important to know the different types. Actual Fraud Definition: Actual fraud is an intentional misrepresentation of fact; or in plain terms lying. Example: An example would be if an agent told a buyer that the basement of a property was mold free when he or she knew full well that it did have mold. Negative Fraud Definition: Negative fraud is the act of purposely leaving out information you legally must disclose; or in plain terms lying through omission.