6 Real Estate Scams to Avoid

Most people, by and large, are decent and honest. But it only takes one or two cheaters, scammers, or liars to make us all skeptical. As long as there’s been land to buy and property to own, there have been scammers. The old joke about selling swampland in Florida was, in fact, a real thing that happened to people for many years.

These days, real estate scams are rare but they happen. Whether you’re a current homeowner or you’re looking to buy, here are a few to watch out for.

Cash for Nothing

One scam to watch out for is the cash deal that requires almost no paperwork. “Owners” forge documents to make the sale seem legitimate and only want cash for the property. They don’t want to work with a real estate professional or a title company. The sale is meant to be quick and cheap. 

If you’re getting a property for much less than the going rate in the neighborhood and the “seller” insists on cash, be careful. You won’t know you’ve been scammed until you try to move into a home that’s still occupied by the actual homeowners. 

Rentals on Craigslist

Fraudulent rentals on Craigslist hurt two parties, though one more than the other. The homeowner doesn’t realize their home is listed for rent and won’t understand why someone with a moving truck wants in. On the other hand, the renter has paid a big deposit that they’re never going to see again.

Some rentals on Craigslist are genuine, but some aren’t. If you’re renting, do a Google search for the property or the rental company listed. Go by the office or call the phone number listed on the website (not on Craigslist) and verify that the property is available for rent. Homeowners can Google their property address to make sure it’s not showing up as an active rental listing anywhere, as well, to help prevent fraudulent rentals and angry “tenants.” If you find your property listed, report it to the local authorities.

Home for Sale on Craigslist

The scam on Craigslist isn’t always for homes that aren’t for sale. Instead, the property you saw in the listing isn’t the one you’re looking at when you arrive at the showing. It’s less a scam and more dishonest marketing tactics. In this case, you’ll likely be told that the original property is no longer available but they “thought you’d like this one.”

This other property is likely to be more expensive, in worse condition, or much smaller than the original one. No credible, ethical real estate professional will pull this fast one on you. If a property isn’t available, they’ll tell you and work hard to find something else that’s comparable. It’s okay to refuse to see a property you weren’t asked about or that’s different than what was advertised.

Wire Fraud

Like the all-cash deal with no paperwork, the wire fraud scam works in much the same way. A “seller” doesn’t want title insurance, real estate professionals, or paperwork involved. Instead, they’ll tell you to wire the funds directly to them to close the deal quickly.

When you do, you’ll find that the home wasn’t for sale, and they weren’t the owners. You’re out the escrow payment you could have used for a legitimate home purchase with no way to get your money back. They’ll have disappeared without a trace.

Foreclosure Fraud

This was more prevalent several years ago when the housing market plummeted and homes went into foreclosure. But it can still happen today. Someone approaches you or advertises a service as a “mortgage advisor” and promises they can help you stay in your home or save your credit.

They’ll offer you a title transference or deed and put legal looking paperwork in front of you. You may even be told to pay your mortgage directly to them. Once they have the paperwork signed, they take out a loan on the property and run with the cash or rent your home to someone else. Because you’ve signed over your home, you get evicted. If you run into problems paying your mortgage, talk to your lender first.

Title Fraud

Title fraud is extremely rare but when it happens, it’s devastating. It often begins with identity theft and impacts homeowners with no mortgage. The scammer obtains fraudulent documents letting them act as the property owner. They transfer the property into their name, get a home loan against the property, and vanish with the cash.

You don’t know it’s happened until lenders demand money, your credit score crashes, or you’re being evicted from your home. The best prevention for this is title insurance and to watch your credit very closely. If you know you’re the victim of identity theft, place a fraud alert with the credit bureaus so any new credit applications are flagged. 

Scams can be rare, but when they happen, they can devastate you financially. Most scammers prey on the desperate, vulnerable, or those not paying attention. Beware of anyone who wants to run through a process without proper contracts or real estate professionals involved. When in doubt, slow down and ask questions. 

When you want to buy, work with a real estate professional to make sure you’re only looking at legitimate offers and the legal process is followed, even with a cash sale. And if someone refuses to close a deal with you because you have a Realtor®, move on to another property. If you suspect you’re the victim of a real estate scam, contact local police and report it. 


  1. It’s so true even though it’s rare, scams happens. That’s why I believe it’s important to do thorough research before investing in something like real estate. I figure that’s why it’s safest to makes sure to work with a trusted real estate agent.

  2. Hi Christine Cleek,

    This great advice to how to avoid real estate scams, really helpful to us. Some other Scams that you need to avoid fake escrow service request, real estate lawyers – fake profiles etc

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