Since purchasing or selling a home is one of the most significant financial decisions you will ever make, scammers are drawn to the real estate market. Knowing how to recognize the warning signs and take precautions is essential, regardless of your level of experience as an investor or first-time buyer.
This is a list of the most typical real estate frauds and warning signs to look out for.
Wire Fraud During Closing
How it works: After breaking into emails that you exchange with your real estate agent, scammers send phony “closing instructions” requesting that you transfer your down payment to a fictitious account.
Warning Signs:
- Last-minute modifications to the payment guidelines
- Email addresses with extra letters that seem a little “off”
- Pressure to move fast
How to Protect Yourself:
Always call your agent or title company directly using a verified phone number before wiring money.
Fake Rental Listings
How it works: Fraudsters copy real online rental listings and repost them with their own contact information to trick people into sending deposits. Red Flags: Prices that seem too good to be true Requests for payment before seeing the property Excuses about why they can’t meet you in person
How to Protect Yourself:
Never wire money to secure a rental. Always meet in person and verify property ownership through public records if possible.
Phony Real Estate Agents
How it works: In order to obtain deposits or personal information, scammers pretend to be real estate agents and provide phony business cards, websites, or online profiles.
Warning Signs:
- Agents who steer clear of in-person meetings
- Aggressive or pushy conduct
- Lack of license number or verifiable references
How to Protect Yourself:
Check if the agent is licensed through your state’s real estate commission website. Ask for references and read online reviews.
Foreclosure and “We Buy Houses” Scams
How it works: Scammers promise to buy your house quickly (usually for cash) in order to save you from going through with a foreclosure, but they either steal your money or deceive you into giving up ownership.
Warning Signs:
- Requests for payment in advance
- Pressure to sign documents as soon as possible
- Unwillingness to answer questions or provide company info
How to Protect Yourself:
Consult with a real estate attorney before signing any contracts, especially if you’re in financial distress
. Title/Deed Fraud
How it works:
Scammers steal your identity to forge documents that transfer ownership of your property to themselves—without you even knowing.
Red Flags:
- Strange notices from your mortgage company
- Unusual charges on property tax bills
- Utility bills for services you didn’t request
How to Protect Yourself:
Regularly check your property records. Consider title insurance that includes fraud protection.
🚦 General Red Flags Across All Scenarios
- Requests for wire transfers or gift cards
- Bad grammar and spelling mistakes in emails
