How do scammers get in on real estate action? They take advantage of the volumes of personal and financial info that pass hands when it comes time to buy a home. Prized info like mother’s maiden names, Social Security Numbers, bank account numbers, and credit info all find their way into play. Sometimes the scammers attempt to steal those pieces of information. In other cases, they go for much bigger hauls, such as escrow fees or entire properties themselves. They weasel their way into the complexities of deeds, escrow, and other aspects of the home-buying process, much of which has an online component, and rake in some serious dollars. In 2023, the FBI listed nearly $145 million in reported losses due to real estate fraud for an average loss of more than $15,000.

Types of real estate scams

From fake rental listings and phishing schemes to mortgage fraud and title theft, real estate scams come in many forms. These deceptive practices often prey on people’s trust and eagerness to secure a property, leaving victims financially and emotionally drained. Below are some common types of real estate scams and tips on how to protect yourself from falling prey to these schemes.

Wire fraud

A scammer posing as a title or escrow company sends you a text or email with wiring instructions. That takes you to a bogus site where you enter your financial info and transfer the money right to the scammers instead of your legitimate title or escrow company.

Fake listings

This is a common scam that renters and home hunters should look out for. Just as it sounds, a scammer posts a fake listing for a piece of property that they have no connection to, whether it is an actual property or entirely made up. These scammers ask for money up front to view the property or put down a deposit of some kind. Of course, the money ends up in their pocket.

Deed theft

As reported by the American Association of Retired People (AARP), this relatively rare yet highly damaging form of fraud involves the loss of property outright. Scammers can pull it off several ways:

  • The scammer forges a deed that transfers ownership, files it with the appropriate clerk, and then quickly flips the property to a buyer who has no idea the deed is a scam.
  • Scammers also pose as mortgage refinancers and trick homeowners into signing a deed transfer as part of the process. The scammer ends up with the property and sells it from under the owner’s feet. This scam often targets older people, as they are more likely to have equity in their home that they might want to capitalize on.
  • In some cases, scammers will pose as the property owners themselves with a brash identity theft play. Through forged driver’s licenses and other forms of identity, they transfer the deeds of paid-off homes to themselves. Again, they flip homes to unsuspecting buyers quickly. Older people often fall prey as they are more likely to own their homes outright. One case in New York City reportedly raked in roughly $1 million this way.

How to avoid real estate scams

By learning to recognize warning signs and following a few key safety tips, you can protect yourself and make smarter, safer real estate decisions. Here are some guidelines you can follow:

1. Work with licensed professionals

Whether it’s an agent, title company, escrow company, mortgage company, or any kind of advisor you work with along your purchasing journey, ensure you’re working with accredited professionals. One place to start is your own personal network. Talk to people you know and get their recommendations based on their experience. When looking for real estate agents in the U.S., you can turn to the National Association of Realtors. The agents listed there have earned their state licenses as part of coursework and an exam. Additionally, they have signed a code of ethics that earns them the title of realtor.

2. If you have doubts, act on them

Scams and the scammers who run them often give signs that they’re bluffing and that things aren’t what they seem. If you spot one, such as a price that’s too low or a seller who seems to rush the sale, consult your agent, realtor, or counsel to determine if the deal, the sellers, and the property are legitimate.

3. Look out for scam texts and emails

Scammers can find their way into the purchasing process. They send emails and texts, posing as mortgage companies, escrow agents, and title companies. They’ll hit you with urgent messages about changed terms, required upfront fees, or needed personal and financial info. Always independently verify any communications you receive with the licensed professionals you’re working with before sharing any info. Even better, use scam detection technology. Our Web Protection and Scam Detector will alert you if a link might take you to a sketchy site. It’ll also block those sites if you accidentally tap or click on a bad link.

4. Monitor your identity and your credit

Buying a home sees plenty of info and money moving around. Keeping tabs on your identity and credit can give you the assurance that everything was handled securely — and help you spot any irregularities that crop up so you can take care of them. You can take care of both easily with our credit monitoring and identity monitoring as part of our McAfee+ plans. Additionally, our identity theft coverage and identity restoration support of up to $2 million can help if it’s determined that you’re a victim of identity theft.​

5. Keep an eye on your physical mail

Signs of deed theft might appear here. If you suddenly stop receiving utility bills or tax statements for your property, that might be a sign that someone else has assumed ownership of your property. Likewise, counties typically send notices and documents regarding loans and property ownership changes by physical mail. Also, shred physical documents, including statements or property notifications. Recycling or throwing them away without shredding them can make them subject to theft. Thieves still search through discarded materials for personal information, even in this digital age. They still swipe mail from mailboxes too. Consider a secure locking mailbox if it’s located in a place where others can access it easily.

6. Use strong, unique passwords for all your accounts

There’s a good chance that your home purchase will lead to new accounts and logins. Make sure you set strong, unique passwords for each. Hackers love weak, re-used passwords because they’re easy to crack and one password gives them access to multiple accounts. A password manager can create and securely store them for you. You can refresh your existing accounts with strong, unique passwords just as easily. If your accounts offer two-factor or multifactor authentication, enable it. This form of authentication makes your accounts much tougher to crack. Even if the password is compromised, your account will send a verification code to another device you own. One that the hacker needs to log in but doesn’t have. As always, never share your code with anyone. Anyone who asks you for it via email, call, or text is out to hack your account.