Real Estate Scams: How to Protect Yourself
Real estate transactions involve large sums of money, making them attractive targets for scammers. Wire fraud alone costs buyers millions of dollars every year. Here are the most common scams and how to avoid them.
Wire Fraud
This is the most dangerous scam in real estate. Hackers compromise an email account (yours, your agent's, or the title company's) and send fake wire instructions that redirect your closing funds to a criminal's account. NEVER trust wiring instructions sent by email without calling the title company directly using a phone number you already have (not from the email). Once money is wired to a fraudulent account, it is almost always gone.
Fake Listings and Rental Scams
Scammers copy real listings and post them at below-market prices to collect "deposits" or "application fees" from unsuspecting buyers or renters. If a deal seems too good to be true, verify the listing through the MLS (Multiple Listing Service) or your agent. Never send money to someone you have not met in person and verified.
Predatory Lending
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. Always compare your final Closing Disclosure to your Loan Estimate. If something changed significantly, ask why before signing.
Key Takeaways
- ✓ALWAYS verify wire instructions by calling the title company on a known number
- ✓Never trust wiring instructions received solely by email
- ✓Verify listings through the MLS — if the price seems too good, it may be fake
- ✓Compare your Closing Disclosure to your Loan Estimate for any surprises
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