Real estate markets can be highly competitive, making even the most cautious buyer vulnerable to scams. Scammers are becoming more sophisticated, so vigilance is essential.

What Is A Real Estate Scam?

Real estate scams involve fraudulent schemes where scammers use real estate to steal money. These scams often involve impersonating real estate agents or lenders to trick victims into handing over cash.

How To Spot Real Estate Scams

1. Lack of Proper Documentation: Legitimate transactions involve extensive paperwork.
2. Pressure to Act Immediately: Scammers use urgency to push victims into hasty decisions.
3. Unrealistic Guarantees: Be wary of deals that seem too good to be true.

7 Dangerous Real Estate Scams To Avoid

1. Wire Fraud Scam
   • Description: Scammers pose as agents to trick victims into wiring funds to fraudulent accounts.
   • Prevention: Verify wiring instructions by calling a known number and stay on the line during the transfer.
2. Foreclosure Relief Scam
   • Description: Scammers offer to stop foreclosure or modify loans for an upfront fee.
   • Prevention: Never pay upfront for services and verify the legitimacy of individuals or companies.
3. Loan-Flipping Scam
   • Description: Scammers convince victims to refinance repeatedly, incurring high fees each time.
   • Prevention: Work only with trusted lenders and consult with family or friends before refinancing.
4. Messages From Fake Buyers
   • Description: Scammers send unsolicited messages to steal personal information.
   • Prevention: Use trusted real estate agents to vet potential buyers.
5. Home Inspection Scam
   • Description: Unqualified inspectors hide home issues to deceive buyers.
   • Prevention: Verify inspectors through reviews and ensure thorough access during inspections.
6. Rental Scam
   • Description: Scammers list non-existent properties to collect deposits from renters.
   • Prevention: Check listing photos for MLS watermarks and see properties in person before committing.
7. Title or Deed Scam
   • Description: Scammers transfer property ownership without the owner’s knowledge or use fake titles to steal deposits.
   • Prevention: Monitor property information at the county deeds office and verify sellers’ identities.

How To Avoid Real Estate Scams

• Consult Licensed Professionals: Work with trusted, licensed real estate agents and lenders.
• Keep Personal Information Secure: Use secure portals for online transactions and avoid public Wi-Fi.
• Avoid Upfront Fees: Never pay for services before they are rendered.
• Verify Last-Minute Changes: Confirm the authenticity of any changes to your transaction.
• Avoid Off-Market Transactions: Stick to official channels for buying and selling properties.

Reporting Suspected Scams

• Document Communications: Keep all interactions with the suspected scammer.
• Contact Your Mortgage Provider: Notify them immediately.
• Report to Authorities: Contact local law enforcement and file a complaint with the Federal Trade Commission.

Conclusion

Real estate scams are a real threat, but awareness and caution can help you avoid falling victim. Always work with trusted professionals, verify information, and be skeptical of deals that seem too good to be true. If you suspect a scam, report it immediately to protect yourself and others.