🇮🇹❤️🇺🇸 5 Common Real Estate Scams You Need to Know About from National Cyber Security Alliance

🇮🇹❤️🇺🇸 5 Common Real Estate Scams You Need to Know About from National Cyber Security Alliance

The National CyberSecurity Alliance, are committed to safeguarding your interests as you navigate the complex world of real estate. Buying a home is a monumental investment and life transition, and it’s essential to stay informed about potential pitfalls, especially in an age where cyber criminals are increasingly targeting home buyers and sellers. Here’s how you can protect yourself from some of the most common real estate scams.

According to the FBI, almost 10,000 Americans fell victim to real estate scams in 2023, losing over $145 million – and those are just the reported cases. In addition, a CertifID report from 2024 found that around one in four American home buyers and sellers encountered suspicious or potentially fraudulent activities, with one in 20 reporting incidents of wire fraud. Unfortunately, many received minimal education about these risks from their real estate professionals.

1. Wire Transfer Fraud

Scammers intercept legitimate wire transfer instructions and provide false account details, tricking victims into sending money to the scammer’s account. This is often done through a Business Email Compromise (BEC) attack, where criminals pose as someone involved in the transaction to manipulate payments.

Protect yourself:

• Educate Yourself: Stay informed about common scams and phishing tactics.
• Use Secure Channels: Avoid sharing sensitive financial information via email; use encrypted communication channels.
• Verify Payment Instructions: Always confirm payment instructions directly with trusted contacts using verified phone numbers or in-person meetings. Be wary of any changes in wire transfer information.
• Alternative Payment Methods: If uncomfortable, consider using cashier’s checks.

2. Loan Flipping and Predatory Lenders

Predatory lenders use deceptive tactics to push borrowers into unaffordable loans, leading to financial distress and possible foreclosure. They often pressure victims into repeated refinancing with worse terms each time, targeting vulnerable individuals like seniors.

Protect yourself:

• Communicate: Discuss any loan offers or reverse mortgages with trusted friends or family.
• Seek Professional Advice: Consult known banks, certified housing counselors, and financial advisors. Avoid unknown lenders who contact you unexpectedly.
• Know Your Rights: Familiarize yourself with federal fair lending laws and regulations.
• Avoid High-Pressure Tactics: Be cautious of lenders pressuring for quick decisions or offering unrealistic terms.

3. Mortgage and Foreclosure Relief Scams

Scammers promise foreclosure relief or loan modifications, demanding high upfront fees but failing to deliver services. They target homeowners at risk of foreclosure and may even try to get victims to sign over their deeds.

Protect yourself:

• Contact Legitimate Sources: Reach out to your mortgage servicer or certified housing counselors for help.
• Avoid Upfront Payments: Legitimate agencies typically do not require upfront fees.
• Avoid Bankruptcy Pressure: Don’t be pressured into declaring bankruptcy to delay foreclosure. Seek help from your lender or federal agencies.
• Report Suspicious Activity: Report scams to authorities like the FTC or the Internet Crime Complaint Center.

4. Deed and Title Fraud

Cybercriminals transfer property ownership without the owner’s consent, which can result in losing your home title. They may steal your identity or use fake titles to “sell” property.

Protect yourself:

• Monitor Property Titles: Regularly check for unauthorized changes.
• Consider Title Insurance: This can protect against deed or title fraud.
• Secure Personal Information: Maintain good cybersecurity habits to protect your sensitive information.
• Avoid Dubious Title Protection Offers: Only work with accredited title insurance agencies.

5. Rental Listing Scams

Scammers post fake rental listings with attractive offers to lure victims into sending deposits or rent payments without seeing the property.

Protect yourself:

• Verify Property Details: Research ownership and rental company legitimacy.
• Avoid Unsecured Payments: Do not use wire transfers, gift cards, or cryptocurrency for rental payments.
• Don’t Pay Upfront: Verify the rental’s legitimacy before paying any money.
• Inspect the Property: Visit the rental property in person or through a trusted representative.

Buying a home is a significant decision, and while scammers may attempt to exploit transactions involving large sums, staying vigilant can help you protect yourself. By verifying every party involved, avoiding high-pressure sales tactics, and safeguarding your sensitive information, you can reduce the risk of falling victim to fraud. The National Security Alliance is here to help you navigate these challenges with confidence and peace of mind.