5 Real Estate Scams Every Homeowner Should Know About

Real estate transactions involve large sums of money, making them attractive targets for criminals. Here are the most common scams homeowners face and how to protect yourself.

1. Wire Transfer Fraud

How It Works

Criminals hack into email accounts of real estate professionals and send fake wiring instructions to buyers just before closing.

Warning Signs

• Last-minute changes to wiring instructions
• Urgent requests sent via email
• Different bank account details than previously provided
• Poor grammar or formatting in official communications

Protection Tips

• Always verify wiring instructions by phone using a known number
• Never trust wiring instructions received solely by email
• Call your real estate agent or attorney to confirm any changes
• Send a small test amount first if possible

2. Seller Impersonation Scams

How It Works

Scammers research property owners (especially those who live out of state) and forge documents to "sell" their property.

Warning Signs

• Properties sold well below market value
• Sellers who refuse to meet in person
• Rushed closing processes
• Unusual payment methods requested

Protection Tips

• Verify the seller's identity through multiple channels
• Require in-person meetings for high-value transactions
• Use reputable title companies
• Check recent property tax records

3. Moving Company Fraud

How It Works

Fake moving companies offer low estimates, then hold belongings hostage for much higher payments.

Warning Signs

• Estimates given over phone without inspection
• No physical business address
• Requests for large upfront payments
• No proper licensing or insurance documentation

Protection Tips

• Get multiple written estimates
• Verify company licenses and insurance
• Read reviews from multiple sources
• Never pay large amounts upfront

4. Home Improvement Contractor Scams

How It Works

Contractors target homeowners with unsolicited offers, collect payment upfront, then disappear or do substandard work.

Warning Signs

• Door-to-door solicitation
• High-pressure sales tactics
• Requests for full payment upfront
• No written contracts or warranties
• Claims of "leftover materials" from nearby jobs

Protection Tips

• Get multiple written bids
• Verify licenses and insurance
• Check Better Business Bureau ratings
• Never pay more than 10% upfront
• Get everything in writing

5. Fake Rental Property Scams

How It Works

Scammers list properties they don't own, collect deposits and rent from multiple victims.

Warning Signs

• Prices significantly below market rate
• Landlord refuses to meet in person
• Requests for money before viewing
• Keys available through lockbox without meeting
• Poor quality photos or photos that don't match the address

Protection Tips

• Always view properties in person
• Verify ownership through public records
• Meet the landlord or property manager face-to-face
• Be wary of deals that seem too good to be true
• Use secure payment methods with records

Red Flags Common to All Scams

Watch out for these universal warning signs:

• Urgency and pressure - "Act now or lose this opportunity"
• Too good to be true - Prices or terms that seem unrealistic
• Requests for unusual payment methods - Wire transfers, gift cards, cryptocurrency
• Poor communication - Grammar errors, generic responses, evasive answers
• Lack of proper documentation - No licenses, contracts, or official paperwork

How to Verify Professionals

Real Estate Agents

• Check state licensing boards
• Verify MLS membership
• Look up disciplinary actions
• Check online reviews and references

Contractors

• Verify state and local licenses
• Confirm insurance coverage
• Check Better Business Bureau ratings
• Ask for recent client references

Title Companies

• Verify state licensing
• Check financial ratings
• Confirm errors and omissions insurance
• Ask about their claims history

What to Do If You're Targeted

Immediate Steps

1. Don't panic - Scammers rely on emotional reactions
2. Document everything - Save emails, texts, and phone records
3. Stop all payments - Contact your bank immediately
4. Report the scam - File complaints with appropriate authorities

Reporting Resources

• FBI Internet Crime Complaint Center - For online fraud
• State Attorney General - For local contractor scams
• Better Business Bureau - For business-related fraud
• FTC Consumer Sentinel - For general consumer fraud

Prevention Best Practices

Due Diligence

• Research all parties involved in your transaction
• Verify credentials and licenses
• Read contracts carefully before signing
• Get everything in writing

Communication Security

• Use secure communication methods
• Verify contact information independently
• Be cautious of unsolicited offers
• Trust your instincts if something feels wrong

Financial Protection

• Use secure payment methods with paper trails
• Avoid wire transfers when possible
• Never pay large amounts upfront
• Keep detailed records of all transactions

The Bottom Line

Real estate scams are unfortunately common, but they're largely preventable with proper awareness and precautions. The key is to:

1. Verify everything - Don't take anyone's word at face value
2. Take your time - Resist pressure to make quick decisions
3. Use professionals - Work with licensed, reputable experts
4. Trust your instincts - If something feels wrong, investigate further

Remember, legitimate real estate professionals understand the need for verification and won't pressure you to skip due diligence steps.

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If you suspect you've been targeted by a real estate scam, contact local law enforcement and relevant regulatory authorities immediately.