How to Prevent Real Estate Fraud

Real estate fraud is very real, especially in today’s world where everyone is trying to do everything online. With more and more people wanting to do contactless showings and closings, it is way too easy for people to take advantage of the situation and scam you out of your hard earned money. Here is what to look for and how to prevent real estate fraud.

Types of Real Estate Fraud

There are different forms of real estate fraud. The most common in today’s society is real estate fraud involving homes for sale. Scammers find property listed for sale or make up their own details around a picture found online, then try to hook in a potential “buyer.”

Online scammers will sometimes ask you for a few hundred dollars deposit to make your appointment for a showing, sometimes claiming that they are out of state. Of course, after you send the money, they disappear. This is clearly a scam, as no real estate agent or investor would ever charge a large deposit to show a home. 

Another thing that people run into is that the online scammer will try to conduct an entire real estate transaction over email and other virtual means, including using wire transfers. The buyers may end up completely empty handed or with a property that they couldn’t legally purchase.

Wire fraud may also involve taking over a planned transaction. Scammers will find details about homes for sale that are about to be in closing and hack into emails and online portals to gain enough information to reach out to you and ask you to transfer the money. If this is the case, you’ll notice little changes in the closing details.

Protecting Yourself from Real Estate Fraud

The best way to protect yourself from real estate fraud is to deal with local real estate agents or look for local for sale by owner listings. You should also enlist the assistance of a good title insurance company so that you can recoup your losses if you are scammed during your closing process. Title insurance ensures that you lose nothing, while title search services will turn up any defect in the title, such as the scammer not having the legal right to sell the property.