Beware of Real Estate Scams: How Buyers and Sellers Can Lose Money

Real estate transactions involve large sums of money, making buyers and sellers prime targets for scammers. Falling victim to a real estate scam can be devastating, but knowing the warning signs can help you avoid costly mistakes. Here are some of the most common scams and how to protect yourself.

1. Wire Fraud Scams

One of the most dangerous and financially devastating scams occurs when criminals intercept emails and trick buyers into wiring money to fraudulent accounts. Scammers pose as lenders, title companies, or even realtors and send emails instructing buyers to wire their down payment or closing costs to a new location. Once the money is sent, it is nearly impossible to recover.

How to Protect Yourself:

• Always verify wiring instructions directly with your lender or title company via a known phone number before sending any funds.

• Be wary of last-minute changes to payment instructions, especially via email.

• Use secure, encrypted communication whenever discussing financial transactions.

2. Fake Rental Listings

Scammers often copy legitimate real estate listings and repost them as rentals. They require an upfront deposit to “secure” the property, then disappear with the money. Renters show up on move-in day, only to find out the home was never available.

How to Protect Yourself:

• Never wire money or pay deposits before seeing a rental in person.

• Verify ownership through property records or a trusted realtor.

• Be skeptical of deals that seem too good to be true.

3. Foreclosure and Loan Modification Scams

Homeowners in financial distress are prime targets for scammers who claim they can help save their homes. Fraudsters pose as foreclosure specialists and charge upfront fees, only to disappear without providing any real assistance.

How to Protect Yourself:

• Work only with HUD-approved housing counselors.

• Never pay upfront fees for foreclosure relief or loan modification services.

• Verify any company offering help with your mortgage lender or a trusted financial advisor.

4. Title Fraud

In this scam, criminals steal a homeowner’s identity, forge documents to transfer the property into their name, and then take out loans against the home. Victims may not realize their home has been stolen until they receive foreclosure notices.

How to Protect Yourself:

• Regularly check property records to ensure your name is still listed as the owner.

• Consider title insurance or fraud monitoring services.

• Be cautious of unsolicited offers to buy your home.

5. Overpayment Scams

Sellers can be targeted when a scammer poses as a buyer and sends a check for more than the asking price. The scammer then requests a refund of the difference, but the original check is fraudulent, leaving the seller out of pocket.

How to Protect Yourself:

• Never accept overpayments or send refunds before verifying funds have cleared.

• Be cautious of buyers insisting on fast transactions or wire transfers.

• Work with a licensed realtor and legitimate escrow services.

Final Thoughts

Scammers are constantly finding new ways to exploit buyers and sellers, but awareness and caution can go a long way in preventing fraud. Always verify any financial requests, work with trusted professionals, and be skeptical of deals that seem too good to be true. If you suspect a scam, report it to the authorities immediately.

Buying or selling a home should be an exciting and rewarding experience—don’t let scammers ruin it for you! If you have questions or need guidance, feel free to reach out so we can work together to keep your money safe.