Avoid These 7 Dangerous Real Estate Scams in 2025

Navigating the housing market can be exciting, but real estate scams pose serious risks to buyers, sellers, and renters. These fraudulent schemes can lead to financial loss, stolen identities, or even loss of property. This guide outlines seven common real estate scams, how to spot them, and steps to protect yourself, ensuring a safe path to homeownership or renting.

What Is a Real Estate Scam?

A real estate scam is a fraudulent act designed to deceive individuals during property transactions, often targeting their money or personal information. Scammers may pose as real estate agents, lenders, or buyers, using tactics like fake listings or forged documents. For example, a scammer might trick a buyer into wiring funds for a nonexistent property.

How Do I Spot Real Estate Scams?

To identify real estate scams, watch for red flags:

• Urgent Demands: Requests to act quickly or send money without verification.

• Unverified Contacts: Emails or calls from unfamiliar sources claiming to be professionals.

• Too-Good-to-Be-True Deals: Properties priced far below market value.

• Lack of Documentation: Missing or suspicious contracts, titles, or licenses. Verify all parties through official channels, such as state licensing boards, and never share sensitive information without confirmation.

See What You Qualify For

Before engaging in real estate transactions, explore your mortgage eligibility. Contact lenders to provide details like income and credit score. Preapproval helps you focus on legitimate properties and avoid scams by working with trusted professionals.

7 Real Estate Scams to Avoid

Here are seven dangerous real estate scams to watch out for:

1. Wire Fraud Scam

Scammers impersonate real estate agents, lenders, or title companies, sending fake emails with wiring instructions for closing costs or down payments. For instance, a buyer might wire $10,000 to a fraudulent account, losing the funds. Always verify wiring instructions directly with your lender or title company via a trusted phone number.

2. Foreclosure Relief Scam

Targeting homeowners facing foreclosure, scammers offer fake “relief” services, charging high fees or tricking owners into signing over their deed. For example, a scammer might promise to stop foreclosure for $5,000 but disappear after payment. Work only with HUD-approved housing counselors for legitimate foreclosure help.

3. Loan-Flipping Scam

In this scam, fraudulent lenders encourage borrowers to refinance repeatedly, charging high fees each time without improving loan terms. This can trap homeowners in a cycle of debt. For instance, refinancing a $200,000 loan multiple times could cost $10,000 in fees. Compare lender offers and avoid frequent refinancing unless it saves money.

4. Messages from Fake Buyers

Scammers pose as buyers, sending unsolicited offers via text or email, often requesting personal information or deposits to “secure” a deal. For example, a seller might receive a fake $5,000 deposit request. Work with a licensed real estate agent to verify buyer legitimacy and avoid sharing sensitive details.

5. Home Inspection Scam

Fake inspectors provide misleading reports to push buyers into overpaying or sellers into unnecessary repairs. For instance, a scammer might claim a $15,000 roof repair is needed to close a deal. Hire a licensed, reputable inspector and attend the inspection to ask questions and verify findings.

6. Rental Scam

Scammers post fake rental listings, often at below-market rates, and demand upfront deposits or rent without showing the property. A renter might pay $2,000 for a nonexistent apartment. Always tour the property in person and verify the landlord’s identity through public records or a lease agreement.

7. Title or Deed Scam

Fraudsters forge title documents to claim ownership of a property, selling or renting it to unsuspecting buyers. For example, a buyer might purchase a $300,000 home only to discover the seller didn’t own it. Use a reputable title company to verify ownership and secure title insurance to protect against fraud.

Take the First Step Toward the Right Mortgage

To avoid real estate scams, work with trusted lenders. Get preapproved for a mortgage to clarify your budget and partner with verified professionals. Ask, “What steps do you take to prevent fraud?” to ensure your lender uses secure processes for transactions.

How Do I Avoid Real Estate Scams?

Protect yourself from real estate scams with these strategies:

• Verify Credentials: Check agent and lender licenses through state real estate boards or the Nationwide Multistate Licensing System (NMLS).

• Use Secure Communication: Confirm wiring instructions or sensitive requests via phone calls to known contacts, not email.

• Research Properties: Use trusted platforms like Zillow or Realtor.com to verify listings and cross-check property records.

• Hire Professionals: Work with licensed real estate agents, inspectors, and title companies with strong reviews.

• Trust Your Instincts: If a deal feels suspicious, pause and seek a second opinion from a trusted advisor.

Take the First Step Toward Buying a House

Start your home-buying journey by partnering with reputable professionals. A licensed real estate agent can guide you through listings and negotiations, reducing scam risks. Explore low-down payment loans like FHA or VA to make buying more accessible while staying vigilant against fraud.

How Do I Report a Suspected Real Estate Scam?

If you suspect a scam:

• Contact Local Authorities: Report to your local police or sheriff’s office for immediate action.

• File with the FTC: Submit a complaint to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov.

• Notify State Agencies: Inform your state’s real estate commission or consumer protection agency.

• Alert Your Bank: If you sent money, contact your bank to attempt a reversal and freeze your account. For example, reporting a $5,000 wire fraud scam promptly may recover funds if caught early. Keep records of all communications and transactions as evidence.

The Bottom Line: Real Estate Scams Can Be Avoided

Avoiding real estate scams requires vigilance, research, and collaboration with trusted professionals. By recognizing red flags like urgent demands or fake listings and using secure processes, you can protect your finances and personal information. Whether buying or renting, verify credentials, use reputable platforms, and report suspicious activity promptly. Start your home-buying journey with preapproval and a trusted team to ensure a safe, scam-free experience in 2025.