Real Estate Scams: How to Protect Yourself

Real estate transactions involve large sums of money, which makes them attractive targets for scammers. Here are the most common scams and how to avoid them.

Wire fraud is one of the costliest scams a buyer can face. Criminals compromise or imitate an email account (yours, your agent's, or the escrow company's) and send fake wire instructions that redirect your closing funds to their own account. Never trust wiring instructions sent by email until you call your escrow officer at a phone number you already have, not one from the email. Treat any "updated instructions" message as suspect. If you wired to the wrong account, call your bank immediately to request a recall and report it at ic3.gov — once the money moves on, it is very hard to recover.

Scammers copy real listings and post them at below-market prices to collect deposits or application fees from buyers and renters. If a deal seems too good to be true, have your agent verify the listing through the MLS (Multiple Listing Service). Never send money to someone you have not verified.

Some lenders push buyers into loans they cannot afford or with hidden terms. Red flags: pressure to skip reading documents, fees that do not match the Loan Estimate, or terms that change at closing. You can check a loan officer's license through NMLS Consumer Access. Compare your Closing Disclosure, which you must receive at least three business days before you sign your loan documents, to your Loan Estimate, and ask about any significant change before signing.

• ✓Always verify wire instructions by calling your escrow officer on a number you already have
• ✓Never trust wiring instructions received only by email — especially "updated" ones
• ✓If you wire to the wrong account, call your bank and report it at ic3.gov right away
• ✓Have your agent verify listings — if the price seems too good, it may be fake
• ✓Compare your Closing Disclosure to your Loan Estimate as soon as you receive it