7 dangerous real estate scams and how to avoid them

In today's fast-moving real estate market, it's easy to feel pressured. Homes sell in the blink of an eye, and even experienced buyers and sellers are vulnerable to a convincing scam. While scammers are more sophisticated thanks to technology, knowing the warning signs of a scam will help protect your investment and your peace of mind.

What is a real estate scam?

Real estate fraud occurs when someone uses a property transaction as a pretense to steal your money – and it's more common than you may realize. According to the FBI, more than 9,300 people were victims of real estate fraud in 2024, totaling over $170 million in reported losses. Real estate and rental scams are a serious threat, with scammers getting better at impersonating real estate professionals, lenders, and title companies.

Real estate scams often involve someone posing as a legitimate contact in your transaction to divert and intercept payments, steal your personal information, or push fraudulent loan deals. In other cases, unscrupulous lenders or unlicensed brokers spread misinformation to trick borrowers into paying unnecessary fees or signing unfavorable contracts.

Protecting yourself starts by working only with licensed, reputable real estate agents and lenders. Take the time to verify credentials, double-check communication sources, and ask questions. A little extra caution up front can go a long way toward safeguarding your finances.

How do I spot real estate scams?

The smartest way to protect yourself from real estate scams is to be alert for common warning signs, especially if you're a first-time homebuyer. While scammers are getting more sophisticated, so are the tools and strategies you can use to defend yourself.

Here are a few red flags to watch for:

• Missing or incomplete documentation. Legitimate real estate transactions require a lot of paperwork. If someone asks for money before you've reviewed and signed documents, that's a clear signal that something's wrong.
• High-pressure tactics. Scammers often create a false sense of urgency, pushing you to act fast without giving you time to review details or consult with legitimate advisors. If someone threatens "losing the deal" if you don't send money or sign documents immediately, it's a red flag.
• Too-good-to-be-true promises. Offers like zero percent interest, no closing costs, or guaranteed approvals with no checks are significant warning signs of fraud. Trust your instincts: if something sounds too perfect to be true, take a close look at the deal and its terms.

7 real estate scams to avoid

Real estate scams take many different forms. While it's impossible to predict every scam, knowing the most common ones can make a world of difference. Here are 7 real estate scams to be on guard for.

1. Wire fraud scam

Wire fraud is one of the fastest-growing threats in real estate today, especially during the final stages of a home purchase. Scammers will pose as your real estate agent, lender, or title company to trick you into wiring your down payment or closing costs to a fraudulent account. Once the money is sent, it's extremely difficult, if not impossible, to recover.

These scams can be very convincing. Criminals often hack legitimate email accounts or create nearly identical fake ones, using elaborate tactics to mimic the tone, timing, and even formatting of real communications. It's easy to be caught off guard, particularly when emotions are high and deadlines are tight.

To protect yourself, always verify wire instructions before sending money. Call your agent, lender, or title company using a trusted phone number you already have. Never trust a phone number or link included in an email alone. Stay on the phone with a verified contact to confirm everything is correct while completing the wire transfer. And remember, legitimate professionals will never rush you or pressure you to act without double-checking the details.

2. Foreclosure relief scam

Foreclosure relief scams target homeowners who are struggling to keep their homes. Scammers pose as legitimate companies or attorneys promising to help you avoid foreclosure or modify your loan, usually in exchange for an up-front payment. They may claim they have a special relationship with your lender or guarantee they can save your home, but these promises are almost always false.

This type of scam is especially destructive because victims lose the money they paid up front and remain at risk of losing their homes. To protect yourself, never pay a company for foreclosure assistance before they've provided services. Legitimate help often is available for free or through trustworthy nonprofit agencies.

If someone claims to be an attorney or foreclosure specialist, do your homework before signing anything or sending money. Check your state's bar association to verify the individual's credentials and contact your mortgage servicer directly using the number listed on your billing statement to confirm any offers or modifications.

If you suspect you’re the target of a foreclosure scam, legitimate help often is available for free through your servicer or through trustworthy nonprofit agencies,

3. Loan-flipping scam

Loan-flipping scams are a particularly dangerous type of fraud, often targeting seniors with significant home equity. In this scheme, scammers convince homeowners to refinance their mortgage repeatedly. Each time they refinance, the borrower is charged elevated fees, a high interest rate, and expensive closing costs. Over time, the homeowner's equity is drained and their monthly payment skyrockets, possibly trapping them in a loan they can no longer afford.

Warning signs of loan-flipping scams include a lender who insists you must refinance urgently, pressures you to cash out home equity you don't need or offers deals that seem confusing or too complicated to explain clearly.

To protect yourself or a loved one, always work with reputable, licensed lenders, and never feel pressured to refinance without taking the time to review all terms carefully. Before signing anything, consult a trusted friend, family member, attorney, or financial advisor.

4. Messages from fake buyers

If you've ever received a random text or email asking if you're interested in selling your home, you're not alone, and you're right to be cautious. While some real estate investors and wholesalers use this tactic legitimately to find off-market properties, many unsolicited offers are scams designed to steal your personal information or trick you into wiring funds to their account.

Scammers may pose as cash buyers or investors, but their real goal often is to get access to your bank account information or personal details. Some even go as far as offering fake loans or asking you to sign over your property temporarily, leaving you at serious financial risk.

Always work with a trusted real estate agent who can screen legitimate buyers on your behalf. Agents have the experience and resources to verify offers and protect your interests. If you're selling your home yourself, take extra precautions. Never share sensitive information up front, insist on written offers from verified individuals, and be wary of anyone who pressures you to move quickly or wire funds.

5. Home inspection scam

A professional home inspection is critical to protect both buyers and lenders, but some scammers pose as licensed inspectors to take advantage of this trust. These individuals may rush through inspections, skip major areas, or intentionally hide serious issues, leaving buyers with costly surprises after closing.

To avoid this scam, always verify your inspector's credentials and reviews independently, even if they come recommended. It's a good idea to interview the inspector beforehand by asking about their experience, what the inspection will cover, and how long it will take. Be wary if they seem evasive, promise to deliver a report without physically inspecting hard-to-reach areas like attics or basements, or rush through the process. During the inspection, make sure all areas are accessed, ask questions, and carefully review the final report yourself. A thorough inspection is one of the smartest ways to safeguard your investment and your peace of mind.

6. Rental scam

Searching online for a rental is common but opens the door to scams. Scammers often post fake listings for properties they don't own, using attractive photos and low prices to lure in renters. In some cases, they pull a bait-and-switch by advertising a desirable property, only to claim it's "no longer available" and push a different, less appealing rental at a higher price.

To verify rental listings are legitimate, look for signs like MLS watermarks on photos and search the address online to see if it's listed elsewhere. Never wire money or sign a lease before you've seen the property in person and confirmed that the person you're dealing with owns or manages it.

7. Title or deed scam

Title and deed scams put homeowners at serious risk by targeting the legal ownership of their property. In one common scheme, scammers steal your personal information through data breaches, phishing, or social engineering. They then forge documents to illegally transfer the title of your property into their own name. Once they control the title, they can take out loans against your home, attempt to sell it, or leave you with unexpected debts, all without your knowledge.

To guard against this, monitor your property records regularly through your county recorder's office. Watch for unexpected mail, missing property tax bills, or lender notices for loans you didn't take out. If you've been part of a data breach, take extra precautions by reviewing your title documents. For added peace of mind, consider signing up for a title monitoring service or identity theft protection plan that includes property monitoring.

Another form of title fraud occurs when scammers create fake deeds to sell properties they don't own. To protect yourself as a buyer, always verify a seller's identity using multiple forms of ID and ensure your real estate agent meets the seller in person. Double-check ownership through official property records before transferring any funds.

How do I avoid real estate scams?

Today's scammers are more sophisticated than ever, often using digital tools to interact with their victims. But by staying alert and taking a few smart steps, you can protect yourself and move forward with confidence. Here's how:

• Work with trusted, licensed professionals. Always partner with real estate agents and lenders who are licensed and have strong reputations. If someone reaches out unexpectedly, take the time to verify their credentials before sharing any information or moving forward.
• Protect your personal information. Treat your sensitive data with care. Never share personal or financial details with someone you don't fully trust. If you're working with an online lender, only upload documents through secure portals and always use a private Wi-Fi or wired internet connection.
• Be cautious about up-front fees. If someone asks you to pay for a service before anything is delivered or pressures you to act fast, that's a red flag. Take a step back and assess before handing over any money.
• Double-check last-minute changes. If you're deep into a real estate transaction and receive a sudden request to change wiring instructions or payment details, slow down. Verify the change directly with your trusted contact before doing anything.
• Stick to verified, on-market transactions. Off-market deals might sound tempting, but they often come with high risks. Working through official channels and licensed professionals helps ensure you know who you're dealing with.

How do I report a suspected real estate scam?

If you suspect you've been a victim of a real estate scam, you should report it to the proper authorities. Here are some steps you can take:

• Document and save any communications with the suspected scammer.
• Contact your mortgage service provider.
• Report the real estate scam to your local law enforcement agency.
• File a complaint with the Federal Trade Commission.

The bottom line: Real estate scams can be avoided

While real estate scams are a real threat, you have the knowledge and tools to protect yourself. If anyone pressures you to send money urgently or makes you feel rushed into a decision, take a step back and trust your instincts. It's far better to walk away from a deal than to risk losing thousands or even hundreds of thousands of dollars.

Always work with licensed professionals you trust, stay alert to common red flags, and never hesitate to ask questions. If you ever suspect you've been targeted by a scam, report it to the authorities right away. Speaking up not only protects you, it helps protect others, too. With the right information and a little extra caution, you can move ahead in your real estate journey with confidence and peace of mind.