Real estate transactions involve large sums and tight timelines, which makes them a prime target for criminals. Knowing the common scams and practical ways to avoid them can protect your money and your home. Below are seven frequent schemes and clear steps you can take to stay safe.
Wire Fraud
Wire fraud is a leading threat in property closings. Scammers impersonate agents, lenders, or title companies and send bogus wiring instructions. If a buyer or seller transfers funds to the wrong account, recovery is often impossible.
Protect yourself by verifying wire instructions by phone using a number you already have for your contact. Do not click phone numbers or links in unexpected emails. Confirm details while on the call, and insist on written confirmation from trusted parties. Legitimate professionals will not pressure you to act without time to confirm.
Foreclosure Relief Scams
People facing foreclosure are vulnerable to companies that promise quick fixes in exchange for up-front fees. Fraudsters may claim guaranteed loan modifications or exclusive relationships with lenders. Victims usually lose the payment and remain at risk of losing their homes.
Avoid paying anyone up front for foreclosure assistance. Contact your loan servicer using the number on your statement, and seek help from HUD-approved housing counselors or reputable nonprofit agencies. Verify any legal representative through your state bar association before signing contracts.
Loan-Flipping
Loan-flipping targets homeowners—often seniors—with repeated refinancing that chips away at equity through high fees and higher interest rates. Each refinance can leave the borrower with bigger payments and less equity.
Guard against this by working only with licensed lenders and taking time to compare terms. If a refinance seems urgent or confusing, consult a trusted advisor or family member. Read the fine print on closing costs and the loan’s total cost over time.
Fake Buyer Messages
Unsolicited texts, emails, or calls from supposed buyers can be legitimate leads or attempts to harvest personal data. Scammers posing as investors may request sensitive information or ask for upfront deposits.
Use a real estate agent to screen buyers, or follow strict verification if you sell privately. Never share bank account numbers, Social Security numbers, or other private data by email or text. Insist on written offers and confirm buyer identities before discussing terms.
Home Inspection Scams
Some fraudsters offer cheap or fast inspections and then miss or hide major problems. A rushed or incomplete inspection can leave buyers surprised by defects and expensive repairs after closing.
Choose inspectors with verifiable licenses, credentials, and local references. Ask what the inspection covers and how long it will take. Attend the inspection when possible, review the written report carefully, and request photos of problem areas.
Rental Listing Scams
Rental scams lure renters with attractive photos and below-market prices for units the scammer does not own. Victims are asked to wire deposits or sign leases for properties they never saw in person.
Always view a rental in person or arrange a live video tour. Verify ownership through public records, check for multiple listings of the same address, and never wire money before signing a lease and seeing the unit. Use reputable platforms and trust your instincts if something seems too good to be true.
Title and Deed Fraud
Title fraud occurs when criminals forge documents or use stolen personal information to transfer ownership or take out loans against a property. The owner may not discover the fraud until a lender or tax notice arrives.
Monitor your property records through your county recorder’s website and watch for unexpected mail or notices. Consider title monitoring or identity-theft protection that includes property alerts. When purchasing, confirm ownership with official records and verify the seller’s identity with multiple forms of ID.
Fraudsters rely on urgency, secrecy, and emotional pressure. The theme across these scams is the same: slow down, verify, and rely on trusted channels. Keep important contacts on hand, double-check instructions by calling known numbers, and get independent advice if a transaction feels rushed or complex.
If you believe you have been targeted, report the incident to local law enforcement, your state consumer protection office, and your mortgage servicer or title company. Acting quickly can reduce the damage and help authorities trace the fraud.
For more resources, check your county recorder and consumer protection agencies. Share this article with friends or family facing a real estate transaction to help prevent loss. Real estate professionals should add verification steps to their client checklists to reduce risk. Stay informed and verify every step.
