Whether you own a home or are buying, selling, or renting one, real estate scams can put your money and personal information at risk. Fraudsters are becoming more sophisticated, using convincing emails, fake real estate listings, and other deceptive tactics to trick unsuspecting victims.
Understanding how these scams work can help you recognize the warning signs and take steps to protect yourself. In this article, we’ll look at some common real estate scams and the red flags to watch for.
Wire Transfer Fraud
Wire transfer fraud can happen when buying a home. A scammer may send an email that looks like it came from your real estate agent, attorney, title company, or lender. The message may include phony wiring instructions and ask you to send money right away.
The goal with this scam is to trick you into sending your down payment or closing funds to the scammer's bank account. Unfortunately, once a wire transfer is sent, it can be very difficult to get your money back.
To protect yourself, always confirm wiring instructions by calling your lender, attorney, or title company using a phone number you know is legitimate. Never send money based only on an email, especially if the instructions have suddenly changed. And always be cautious of unexpected messages requesting immediate action.
Rental Scams
Rental scams often target people looking for a home or apartment online. A scammer may copy photos and details from a real rental listing and post it as their own.
The scammer will often ask for a security deposit, application fee, or first month's rent before allowing you to see the property. They may claim they are out of town and cannot show the property in person. After receiving your money, they disappear.
Whenever possible, see the property in person before making any payments. Research the address online and be cautious if the rent seems much lower than similar properties in the area. If the landlord or rental company refuses to meet with you in person or pressures you to send money quickly, consider it a warning sign.
Title Fraud
Title fraud, sometimes referred to as home title fraud or deed fraud, happens when criminals use stolen personal information to impersonate the owner of a property. They may try to transfer ownership of your home, take out a loan against your property, or even sell it without your knowledge.
Often, homeowners do not discover title fraud until they receive unexpected bills, loan documents, or notices related to their property.
To help protect yourself, keep your personal information secure and monitor your credit reports regularly. If you receive unexpected mail about your home, mortgage, or property ownership, investigate it right away.
Mortgage Relief and Foreclosure Scams
Mortgage relief scams often target homeowners who are having trouble making their mortgage payments. Scammers promise to lower payments, stop foreclosure, or help homeowners qualify for special programs. In return, they may ask for large fees upfront or request personal and financial information. Some scammers even tell homeowners to stop communicating with their lender, which could prevent them from getting legitimate help with their mortgage.
If you are struggling to make your mortgage payments, contact your lender directly. A trusted lender can discuss available options and help you understand the next steps. Be cautious of anyone who guarantees results or asks for payment before providing assistance.
Contractor and Home Improvement Scams
Contractor scams are common after storms and during home improvement projects. A dishonest contractor may offer repairs at a very low price and ask for a large payment before any work begins. After receiving the money, they may do poor-quality work or disappear before the job is finished.
In some cases, someone might come to your door claiming they noticed damage to your roof, driveway, or siding and insist that repairs are needed right away.
Before hiring someone to work on your home, shop around. Get cost estimates from a few different contractors or companies, read reviews, and ask for references. Make sure they are properly licensed and insured, and that all project details are included in a written contract. It is also smart to avoid paying the full cost of a project upfront. Depending on the type of work, a contractor may require a deposit or payments at different stages of the project. Be sure the payment terms are clearly outlined in your contract before the work begins.
While real estate scams can take different forms, many rely on similar tactics, such as creating a sense of urgency or impersonating someone you trust. If something doesn’t seem right, slow down, ask questions, and independently verify the information before sending money or sharing personal information.
Whether you’re buying, selling, renting, or maintaining a home, taking a few extra precautions can help you avoid costly scams. BankFive is committed to helping customers recognize fraud risks, safeguard their finances, and make informed financial decisions.
Understanding how these scams work can help you recognize the warning signs and take steps to protect yourself. In this article, we’ll look at some common real estate scams and the red flags to watch for.
Wire Transfer Fraud
Wire transfer fraud can happen when buying a home. A scammer may send an email that looks like it came from your real estate agent, attorney, title company, or lender. The message may include phony wiring instructions and ask you to send money right away.
The goal with this scam is to trick you into sending your down payment or closing funds to the scammer's bank account. Unfortunately, once a wire transfer is sent, it can be very difficult to get your money back.
To protect yourself, always confirm wiring instructions by calling your lender, attorney, or title company using a phone number you know is legitimate. Never send money based only on an email, especially if the instructions have suddenly changed. And always be cautious of unexpected messages requesting immediate action.
Rental Scams
Rental scams often target people looking for a home or apartment online. A scammer may copy photos and details from a real rental listing and post it as their own.
The scammer will often ask for a security deposit, application fee, or first month's rent before allowing you to see the property. They may claim they are out of town and cannot show the property in person. After receiving your money, they disappear.
Whenever possible, see the property in person before making any payments. Research the address online and be cautious if the rent seems much lower than similar properties in the area. If the landlord or rental company refuses to meet with you in person or pressures you to send money quickly, consider it a warning sign.
Title Fraud
Title fraud, sometimes referred to as home title fraud or deed fraud, happens when criminals use stolen personal information to impersonate the owner of a property. They may try to transfer ownership of your home, take out a loan against your property, or even sell it without your knowledge.
Often, homeowners do not discover title fraud until they receive unexpected bills, loan documents, or notices related to their property.
To help protect yourself, keep your personal information secure and monitor your credit reports regularly. If you receive unexpected mail about your home, mortgage, or property ownership, investigate it right away.
Mortgage Relief and Foreclosure Scams
Mortgage relief scams often target homeowners who are having trouble making their mortgage payments. Scammers promise to lower payments, stop foreclosure, or help homeowners qualify for special programs. In return, they may ask for large fees upfront or request personal and financial information. Some scammers even tell homeowners to stop communicating with their lender, which could prevent them from getting legitimate help with their mortgage.
If you are struggling to make your mortgage payments, contact your lender directly. A trusted lender can discuss available options and help you understand the next steps. Be cautious of anyone who guarantees results or asks for payment before providing assistance.
Contractor and Home Improvement Scams
Contractor scams are common after storms and during home improvement projects. A dishonest contractor may offer repairs at a very low price and ask for a large payment before any work begins. After receiving the money, they may do poor-quality work or disappear before the job is finished.
In some cases, someone might come to your door claiming they noticed damage to your roof, driveway, or siding and insist that repairs are needed right away.
Before hiring someone to work on your home, shop around. Get cost estimates from a few different contractors or companies, read reviews, and ask for references. Make sure they are properly licensed and insured, and that all project details are included in a written contract. It is also smart to avoid paying the full cost of a project upfront. Depending on the type of work, a contractor may require a deposit or payments at different stages of the project. Be sure the payment terms are clearly outlined in your contract before the work begins.
Move Forward with Confidence
While real estate scams can take different forms, many rely on similar tactics, such as creating a sense of urgency or impersonating someone you trust. If something doesn’t seem right, slow down, ask questions, and independently verify the information before sending money or sharing personal information.
Whether you’re buying, selling, renting, or maintaining a home, taking a few extra precautions can help you avoid costly scams. BankFive is committed to helping customers recognize fraud risks, safeguard their finances, and make informed financial decisions.