Real Estate Closings

8 common residential real estate scams and how to avoid them

Tips for ensuring that your real estate experience is secure and hassle-free

Illustrtion of person looking at laptop saying "fraud alert"

Published on

December 3, 2023


In this article:

Real estate transactions are significant financial commitments, making them prime targets for scammers looking to take advantage of unsuspecting buyers and sellers.

More than 13,600 people were victims of real estate or rental fraud in the year 2020 alone, according to statistics kept by the FBI.

There has been a steady increase in losses reported by victims of real estate/rental scams in recent years, years, leading some law enforcement agencies to warn the public to be cautious..

In this blog post, we'll explore some of the most common real estate scams and provide tips on how to avoid them, ensuring that your real estate experience is secure and hassle-free.

1. Phishing Scams: Protect Your Personal Information

Phishing scams involve fake emails or websites that appear to be from legitimate sources, such as real estate agencies or title companies. The emails aim to steal personal and financial information and typically contain a sense of urgency or a reason for the recipient to take immediate action. For example, they may claim there is a problem with the transaction, missing paperwork, or an impending deadline.

How to avoid phishing scams

Always verify the authenticity of emails and websites by checking the sender's email address and ensuring secure connections (look for "https://"). Never share sensitive information via email. You should contact the company directly using their official contact information.

2. Bait-and-Switch Rental Scams: Verify Listings

Scammers falsely list rental properties online at attractive prices to lure in victims. After initial contact, they claim the property is no longer available and offer something else at a higher price. The scammer will then request an upfront payment, such as a security deposit or application, and then disappear upon payment.

How to avoid bait-and-switch rental scams

Research rental listings on reputable websites, and cross-reference information with multiple sources. You should be cautious of deals that seem too good to be true. Always visit the property in person before making any payments.

3. Wire Fraud: Confirm Payment Instructions

In a wire fraud scam, hackers intercept communication between buyers, sellers, and their real estate agents. They then send fraudulent wiring instructions, diverting funds to their accounts.

How to avoid wire fraud

Verify all payment instructions through a trusted source, preferably in person or via a phone call, before sending money. Establish a secure communication channel with your real estate agent.

4. Title Fraud: Regularly Monitor Your Property

Fraudsters can falsely represent themselves as the property owner by manipulating or forging property documents, such as deeds, titles, or mortgages. They may use these manipulated documents to sell or mortgage the property without the knowledge or consent of the legitimate property owner. Victims may only realize the fraud when they face eviction or a dispute.

How to avoid title fraud

Monitor your property records regularly for any unusual activity or unauthorized changes. You should strongly consider purchasing title insurance when you purchase a home to protect against potential losses.

5. Foreclosure Rescue Scams: Seek Professional Advice

These scams target homeowners facing foreclosure, promising to save their homes in exchange for fees or property transfers.

Scammers will contact homeowners and make enticing promises, and claim to have insider knowledge or special connections with lenders. They will typically request the homeowners pay upfront fees or even sign documents that effectively transfer ownership or control to the scammer.

How to avoid foreclosure rescue scams

Consult a reputable attorney or housing counselor for foreclosure assistance. Be cautious of unsolicited offers and do thorough research on any firm claiming to offer rescue services.

6. Rental Application Scams: Verify Landlord Identity

Scammers will pose as a property owner or landlord to collect application fees and personal information from prospective tenants without any intention of renting the property.

The scammers will usually create a sense of urgency to pressure potential renters to act quickly, using phrases like  "limited availability" or "high demand." They will also often provide excuses for not allowing potential tenants to visit the property in person, such as maintenance, the current tenant, or other reasons.

How to avoid rental application scams

You should the landlord's identity by requesting proof of ownership or contacting the property management company directly. You should also make sure to tour the property before signing anything.

7. Loan-Flipping Scam

Scammers can target individuals who are in need of money or seeking loans by tricking borrowers into repeatedly refinancing or rolling over their existing loans. Scammers will lure victims with the promise of lower interest rates, increased loan amounts, or other favorable terms.

However, the true intent of the scam is to extract more fees and interest payments from the borrower, ultimately putting them into a cycle of debt that can be difficult to escape.

How to avoid loan flipping scams

Be cautious when receiving unsolicited loan offers through phone calls, emails, or mail. Legitimate lenders typically do not make unsolicited offers. Make sure to research the lender and carefully review all loan agreements and terms — paying close attention to interest rates, fees, and repayment schedules.

8. Home Inspection Scam

Unqualified providers will scam and take advantage of homebuyers looking to perform a property inspection. This scam can lead to serious issues down the road if potential problems go undetected prior to the sale closing.

How to avoid home inspection scams

Needless to say, you should thoroughly vet and research a home inspector before hiring them — ask for references, verify they are licensed and certified in accordance with your state's regulations, and research internet reviews if available.


Protecting yourself from real estate scams requires vigilance, verification, and a healthy dose of skepticism.

Before providing any personal information, payment, or signing anything, always conduct due diligence, confirm the authenticity of the parties involved, and seek professional advice when necessary. 

About the author

Pederson Real Estate Law

Pederson Real Estate Law is a boutique law firm based in Greenwich, Connecticut. We provide experienced, efficient legal services for clients in residential real estate closings —purchases, sales, and refinances.