How to Spot and Avoid Real Estate Scams as a Home Buyer

Blog posted On August 29, 2024

Buying a home is probably one of the biggest financial investments you’ll make in your life, making you an appealing target for hackers and fraudsters. From wire fraud to email fraud to solicitation calls, there are several ways people might try to get your personal information and/or money. So in this blog, we’ll explore some of the most common real estate scams and how to avoid them.

SOLICITATION CALLS

Overview: Solicitation calls are when unknown numbers call you and ask you to buy, rent, or invest a home. Though the person on the other line may sound legit or identify themselves as an agent, they likely are trying to get information from you over the phone.

How to protect yourself:

• Don’t trust an unknown number and verify with me, your lender, if someone unfamiliar claims to represent us
• Don’t disclose sensitive information, like your SSN, bank accounts, or credit card numbers
• If you’re being rushed to “act immediately” and pressured into sending money, this is another red flag
• Block unwanted callers

WIRE FRAUD

Overview:

The most common fraud associated with home loan closings, wire fraud happens when cybercriminals try to convince borrowers to send their funds to a new account last minute. They may call your phone, send you an email, or text you, claiming to be a representative from your title or escrow company. These real estate impersonators create these fake email addresses and phone numbers that look almost identical to the ones from your title or mortgage company. Don’t let these phishing attempts trick you! Last-minute changes to your wire transfer are rare, so make sure to verify with your trusted contacts before agreeing to changes right before your closing.

How to protect yourself:

• Beware of unknown attachments
• Look out for odd spellings and typos
• Question any last-minute changes during the loan process
• Do NOT wire funds without verbal confirmation from a known source

EMAIL FRAUD

Overview: Email fraud is when imposters will try to get your personal information via email. They likely will claim to be someone they’re not (title agent, lender etc.).

How to protect yourself:

• Don’t open sketchy documents from unknown sources
• Don’t trust the display name — always check the sender’s actual address!
• And most importantly, use common sense! If something feels off, call your lender right away
• Look for wrong letters in an email address

FALSE LISTINGS

Overview: Scammers will use stolen photos of existing properties and descriptions from real listings to boost the legitimacy of the fake listing.

How to protect yourself:

• One of the red flags you can watch out for is that the scammer will request upfront payments before you can even view the property
• Don’t commit any money before you’ve toured the place
• Sellers will try to falsely sell vacant land and vacation homes, perfect targets for this fraud

CONCLUSION

All in all, to avoid fraudsters and scammers along the home buying process, follow these general rules of thumb:

• Rely on your network and trusted recommendations
• Research thoroughly and compile multiple quotes
• Be cautious of upfront and last-minute fees
• Always double-check where your personal information is going in order to protect your identity and finances
• Confirm the legitimacy of data requests
• Verify email addresses and phone numbers

If something feels suspicious, trust your own internal fraud detector. You now know how to set realistic expectations with your home buying journey, and you’re clued in to the most common tactics of scam artists. If you need help during your home hunting, we’re always here to provide support and resources.

Source: National Association of REALTORS®, LifeLock