Finding and purchasing your next home is exciting. Don’t let scammers rain on your parade. Keep an eye out for these common scams.
Whether it’s a starter home, second home, or forever home, buying a house is a big moment — many agree it will be one of the most memorable milestones of your life. It’s a decision that involves excitement, planning, and — let’s be honest — stress.
On that topic, there is a very particular kind of undue stress that should never be part of anyone’s home-buying experience. We’re referring, of course, to scammers looking to take advantage of unsuspecting buyers.
“Many of these criminals work the same way,” says Rodnée Warr, Business Execution Senior Manager for Wealth & Investment Management, Wells Fargo Clearing Services. Warr, who also holds a Master of Arts in Gerontology, goes on to say, “Scammers impersonate legitimate sources, and they do this by placing malware on customers’ devices to steal information or send phishing emails, texts, calls, and mailings. It is important to verify every communication received for legitimacy.”
Don’t get cold feet just yet, though. We have good news: A little awareness and the right precautions can help you avoid the most common pitfalls. Let’s go through them now.
1. Wire fraud — double-check before you send a dime
Spot the scam:
Hackers may try to intercept your email communications at any of the important steps leading up to final sale. They can go as far as sending fake wiring instructions, thus diverting your down payment or closing funds to themselves instead.
Help protect yourself:
- Always confirm wire instructions by phone with your escrow or title officer
- Be cautious with last-minute changes to payment details
- Triple-check email addresses and avoid clicking unfamiliar links
2. Title and deed scams — ownership isn’t always what it seems
Spot the scam:
A wrong doer may forge ownership documents and try to sell properties they do not own. Or worse, they could attempt stealing your title after its purchase.
Help protect yourself:
- Work only with a reputable title company
- Purchase title insurance
- Research the seller and verify their ownership records
3. Fake listings — it pays to be skeptical
Spot the scam:
Fraudulent listings may ask for deposits before you’ve even seen the home, and that’s a big red flag.
Help protect yourself:
- Verify listings through licensed agents or official platforms
- Never — ever! — send money before seeing a property you’re interested in
4. Earnest money gone missing — where did it go?
Spot the scam:
Despite handing over your earnest money, it never reaches escrow. Instead, the fake agent or seller pockets the cash and disappears.
Help protect yourself:
- Only submit earnest money to verified escrow or title companies
- Request written receipts and documentations
- Ask your real estate agent for guidance on standard practices
5. Home inspection tricks — no peace of mind
Spot the scam:
Phony or unqualified inspectors offer glowing reports to cover up major issues in the home — or are paid by the seller to downplay problems.
Help protect yourself:
- Hire your own certified home inspector
- Read reviews, verify credentials, and attend the inspection, if possible
- Don’t skip this step, no matter how competitive the market is
6. Mortgage scams — false promises
Spot the scam:
Fraudsters pose as lenders or mortgage relief companies offering too-good-to-be-true “deals,” often with exorbitant upfront fees, hidden terms, and/or fake loan approvals.
Help protect yourself:
- Work only with licensed lenders and mortgage brokers
- Be wary of offers that promise guaranteed approvals or unusually low rates
- Avoid companies that ask for large upfront fees before services are even rendered
- Check the NMLS Consumer Access site for lender reviews and licensing
At the end of the day, a little vigilance can go a long way. Does it all sound slightly stressful? Sure. But is unnecessary stress also avoidable if you know what to look out for, don’t rush into anything, and double-check you’re working with verified professionals? Absolutely.
- Be careful and alert: Work only with licensed professionals, keep your personal information secure, and avoid off-market transactions
- Always check with your professionals when you receive an electronic correspondence asking you for privileged information
- Report a suspected real estate scam to the proper authorities: your mortgage service provider, local law enforcement, and the Federal Trade Commission
Your dream home is out there, and being aware of these common scams can help make sure you’re the one who ends up holding the keys.
