Top 3 Real Estate Scams and How To Avoid Them

By Richard Warner

I have been an investor and landlord for 5 years. When I got my official real estate license, I started as a First Time Homebuyer Specialist and have since received specialization certifications in Luxury Homes, Probate, and Divorce.

Homebuyers and sellers beware: Real estate fraud is on the rise. With technology advancing and more transactions happening online, criminals have found new ways to exploit weaknesses. Whether you’re buying, selling, or renting, no one is safe from these risks.

Real estate fraud has jumped over 30% in the past year alone, with wire fraud scams stealing millions from buyers and sellers. I’m here to expose these scams and give you practical advice on protecting yourself and your home from real estate fraud.

1. Fake listings. This is a common real estate scam where scammers advertise homes that either don’t exist or aren’t theirs to sell, often using low prices to attract buyers or renters. Once they collect deposits or fees, they disappear. Last year, fake rental scams cost victims nearly $300 million, targeting people struggling to find affordable housing, especially in competitive markets. For example, a woman in New York lost thousands to a fake listing.

To protect yourself, verify listings through official sources and work with licensed real estate agents who can confirm property details. If a deal seems too good to be true, trust your instincts; it probably is.

2. Wire transfer scams. This is a growing danger in real estate, especially during closing. Scammers hack emails or pretend to be your Realtor or title company to send fake wiring instructions, tricking buyers into sending their down payments directly to them. In 2024, these scams cost victims an average of $96,000 per incident. They’re dangerous because scammers research targets, use phishing emails, and strike when large sums of money are transferred.

To protect yourself, don’t trust wiring instructions sent by email alone. Always confirm by calling your Realtor or title company using verified contact info. Use two-factor authentication to secure your accounts and educate everyone involved in the transaction about fraud warning signs.

3. Title piracy. It’s a scam where criminals use fake IDs and forged documents to steal a property’s deed. For example, a homeowner once found out her house had been sold without her knowledge after scammers filed fraudulent paperwork. This fraud is increasing because digital records make it easier to forge documents, and scammers often target vacant or elderly-owned properties, leaving victims unaware until it’s too late.

Regularly check your property records with the local county clerk’s office to protect yourself. Buying title insurance can also help protect against ownership disputes. If you notice anything suspicious about your property, report it immediately.

Real estate fraud is becoming more common, but awareness is your best defense. You can avoid falling victim by understanding how scammers work and taking steps to protect yourself, like verifying details and asking questions. Buying or selling a home should be exciting, not stressful.

If you’re worried about staying safe from fraud, I’m here to help. I specialize in guiding clients through real estate transactions while keeping them protected. Together, we’ll make sure your experience is smooth and secure. Call me at (502) 338-2861 or email rich@howtoaffordhomes.com. Let’s ensure you’re prepared to navigate today’s market safely.