Real Estate Scams to Avoid: Protecting Your Buyers and Your Business
Real estate continues to be one of the most valuable and fast-moving markets, which unfortunately makes it a prime target for scammers. Whether you’re working with first-time homebuyers or seasoned investors, protecting your clients from fraud is not only part of your professional responsibility, it’s essential to maintaining trust and safeguarding your career.
Below, we’ll highlight some of the most common real estate scams to watch out for and share practical tips on how you can protect your buyers and your business.
1. Wire Fraud Scams
Wire fraud is one of the most prevalent and financially devastating scams in real estate today. Criminals impersonate agents, lenders, or title company representatives to trick buyers into wiring funds to fraudulent accounts.
How to protect your clients:
- Always verify wiring instructions verbally through a trusted phone number.
- Encourage clients never to act on last-minute changes sent via email.
- Educate buyers about this scam early in the transaction process.
2. Fake Listings and Rental Scams
Fake rental listings remain a growing issue, according to the Federal Trade Commission. Scammers often post properties online that don’t actually exist, or that they don’t own, to lure in unsuspecting renters or buyers. They may request deposits or application fees upfront, only to disappear once the money is sent.
Red flags to look for:
- Prices that seem “too good to be true.”
- Pressure to pay before viewing the property.
- Owners who claim to be out of town and unavailable for in-person meetings.
3. Title and Deed Fraud
In this scheme, criminals use stolen identities to forge documents, transfer ownership, or take out loans against a property they don’t own. This can cause massive legal headaches for both agents and buyers.
Prevention tips:
- Work only with reputable title companies.
- Recommend that buyers purchase title insurance.
- Monitor public property records for irregular changes.
4. Escrow Fraud
Escrow scams occur when criminals pose as escrow officers or companies to intercept funds. Since escrow accounts typically hold large sums of money, this scam can be particularly damaging.
Ways to safeguard transactions:
- Confirm that escrow companies are licensed and legitimate.
- Provide clients with official escrow contact information.
- Stay involved and monitor every stage of the process.
5. Phishing and Email Spoofing
Scammers may send fake emails that look like they came from a trusted professional—complete with logos and similar addresses—to steal sensitive information.
Protective measures:
- Encourage clients to double-check sender addresses carefully.
- Avoid clicking on suspicious links or downloading attachments.
- Use secure, encrypted platforms for document sharing whenever possible.
Protecting Your Buyers Protects Your Reputation
Every real estate agent knows that reputation is everything. Falling victim to, or being associated with, real estate scams can damage client trust and jeopardize your business. By staying informed and proactive, you not only protect your buyers’ investments but also reinforce your credibility as a trusted professional.
At Sea Coast Real Estate Academy, we prepare future agents with the tools and knowledge they need to thrive in today’s market. From understanding contracts to spotting red flags, our courses are designed to help you build a strong foundation for a successful career.
Ready to Take the Next Step?
If you’re considering a career in real estate or looking to expand your knowledge, now is the perfect time to enroll in a course with Sea Coast Real Estate Academy. Learn how to protect your clients, and your business, by starting your real estate journey with us today.