Real estate fraud is a growing concern. Scammers use deceptive tactics to manipulate property transactions, which could result in financial losses, title disputes or even the wrongful sale of a property. By educating yourself on the warning signs and taking preventive measures during real estate transactions, you can protect yourself from real estate fraud.

Common Types of Real Estate Fraud

• Title Fraud: Scammers forge documents to claim ownership of a property and attempt to sell or refinance it without the legitimate owner’s knowledge.
• Wire Fraud: Fraudsters impersonate real estate agents or escrow companies, sending fake wiring instructions to divert closing funds.
• Mortgage Fraud: This involves misrepresentation of financial information, including falsifying income, loan details or property value.
• Foreclosure Scams: Scammers target vulnerable homeowners with false promises of foreclosure relief, tricking them into signing over property rights.

Red Flags to Be Alert To

• Suspicious Communication: Be wary of last minute changes to wire instructions or unfamiliar email addresses. Scammers often create fake emails that mimic emails from legitimate companies. Verify phone numbers before calling to confirm details; the number could be fake too.
• Unfamiliar Liens or Ownership Changes: When buying property, always request a title search to verify ownership and check for hidden liens.
• Unrealistic Offers or Pressure: Be cautious of deals that seem too good to be true or agents that push for rushed decisions.
• Incorrect or Altered Documents: Review all contracts and closing documents carefully for inconsistencies or forged signatures.

How to Prevent Real Estate Fraud

• Use Reputable Professionals: Work with licensed real estate agents, escrow companies and attorneys. Verify their credentials and ask for references.
• Confirm Wiring Instructions: Before transferring funds, call the escrow company directly using a verified phone number to confirm the wiring details.
• Obtain Title Insurance: Title insurance protects you from financial losses due to title defects or ownership disputes caused by fraud.
• Secure Your Personal Information: Protect sensitive details like social security numbers, banking information and legal documents to prevent identity theft.

Unfortunately, fraud doesn’t stop here. Click HERE to review tips on how to avoid wire transfer fraud.