TL;DR: Beware of these common real estate scams!
- Wire Transfer Fraud: Verify all payment instructions with your real estate agent and double-check the contact information against your documents.
- Rental Scams: Always view rental units in person and verify the legitimacy of property managers or owners.
- Vacant Land Scams: Confirm ownership through proper identification and documentation, and meet in person.
- Fake Real Estate Buyers: Be cautious of all-cash offers and ensure thorough checks on buyer’s finances.
There’s a lot of money in real estate.
NBC News explains a concept that experienced real estate agents know very well. Namely, that homes tend to keep more of their value compared to other assets, even when the economy faces issues like high inflation. While there are always exceptions —and no guarantees — well-maintained homes tend to increase in value over time.
That’s great news for both buyers and sellers. Unfortunately, the high and often reliable value of real estate attracts scam artists and fraudsters. Those criminals know that there’s a lot of money in real estate, too.
Whether you’re a buyer, a seller, or even a renter, it’s vital to recognize the signs of a real estate scam. Let’s look at some common types of real estate fraud and how to avoid them.
1. Wire Transfer Fraud
Real estate wire transfer fraud involves tricking someone, often the buyer, into sending money to a scammer. That scammer may pose as an agent of your title company or escrow company, as Bankrate explains. This can be a real estate agent scam, too — the scammers might pretend to be your agent and convince you to send money that way.
Their goal is to target people who legitimately need to wire money for a real estate expense and trick them into sending it to the wrong place. Scammers often set up fake websites, emails, and phone numbers that look nearly identical to the real ones.
You can protect yourself from this real estate scam by not falling for the fraudster’s pressure tactics and demands.
Instead of only replying to a text or simply sending the money when asked, double check your documents and call the relevant number listed on them. Additionally, contact your real estate agent before taking any action. That way, you can ensure you’re sending your money to a real business at the appropriate time.
2. Rental Scams
You might not be planning on buying a home in the near future. Or, you might need a rental as a stopgap while you search for the perfect home. Either way, you may encounter rental property scams.
Realtor.com explains rental scams often center on fake listings. These might be copied from real listings or created out of thin air. Either way, rental scammers tend to ask for money without letting you visit the property in person. They’ll make the listing seem like an incredible value, implicitly pressuring their targets to act quickly.
That’s a key part of keeping yourself safe from real estate rental scams. When an owner or property manager says they can’t meet you and show the unit, but pressure you to put down a security deposit and first month’s rent, it’s a red flag.
Always see the unit in person and confirm that the owner or property manager is the real deal. Ask for references and documentation of ownership and follow up on them.
3. Vacant Land Scams
Realtor Magazine highlights an increasingly common scam that involves real estate, but not a home: fake land listings. This scam is often targeted at real estate agents but can affect buyers too.
Similar to rental scams, vacant land scams involve a fraudster finding a vacant piece of land with a clean title. They then forge documentation of ownership and convince a real estate agent to list the property or a buyer to purchase it.
To avoid this scam, insist on seeing identification, verifying ownership, and meeting face to face. This is one of many situations where a knowledgeable and experienced real estate agent can help you avoid falling victim to a scam.
4. Fake Real Estate Buyers
Scams can affect home sellers, too. An all-cash offer for a property is one way fake buyers try to defraud sellers.
The supposed buyer’s goal isn’t to actually buy your property. Instead, they want to run some type of refund scam (the check they sent you to begin the process won’t clear, in this case) or otherwise trick you into giving them your money.
Be wary of all-cash buyers who avoid face-to-face and phone conversations and pressure you for a quick sale. Work with your agent and make sure the due diligence related to the buyer and their finances is completed before moving forward.
An Agent Who Knows Reston and the Region
Nikki Lagouros has deep experience helping buyers and sellers in Reston achieve their dreams. Her knowledge of the local market, connections in the industry, and focus on technology and analytics gives buyers and sellers the support they need throughout the process.