How to Spot 10 Common Real Estate Scams

Julie 14

Real estate scams are a big problem in today’s real estate market thanks to homeowners desperate to stave off foreclosure and con artists who are eager to rip off those looking to buy or rent. It can be hard to know a legitimate opportunity when it comes along, especially if that opportunity seems to good to be true. Working with a reputable real estate agent can be a great way to avoid the most common types of real estate scams but there are other things you can do to protect yourself. Let’s start by identifying the most common real estate scams you may face while either searching to buy a house, rent a house or buy income property and then let’s talk about a few ways you can protect yourself from being scammed.

Common Real Estate Scams

Phony Seminars

This is a big one and often seems entirely legitimate but this one also falls into the “if it’s too good to be true, it probably is” category. The problem with this particular scam is that initially, there is often no cost to you. You’ll be offered free tickets to a seminar, usually offered a free gift for attending and promised that you will not be subjected to high pressure sales tactics. When you arrive at the seminar though, you almost always learn the “free” gift is only offered to those who purchase tickets to additional seminars. That’s not a big deal if you have the money to shell out for additional seminars because they’ll make these additional seminars sound amazing. The problem? Most often, they’re not. They’re a waste of money that will teach you nothing of any valuable, aside from teaching you to be a little more careful about how you spend your money.

“Renting” Empty Houses

This is a disturbing, but not uncommon, real estate scam that makes victims of homeowners and renters alike. In this one, enterprising con artists will look for homes that will be abandoned for an extended period of time – often while the actual homeowner is on an extended vacation or is working in another state or even country – and posts listings for the home online. They’ll sometimes claim to be the owner of the home but will also sometimes claim to be someone authorized to rent on behalf of the homeowner. Sometimes the con artist will break into the home and change the locks. Other times, they’ll just access the home using a spare key they’ve discovered somewhere on the property. It also isn’t unheard of for an especially enterprising criminal to pay a locksmith to let them in. Many people who run this type of scam will forge official looking documents for the renter to sign and will then collect rent until the scam is discovered. The end result is always the same. A well meaning renter will contact the con artist about the home listing, will “rent” the home, usually paying in case, and then the real homeowners will return finding someone they don’t know living in their home.

“Renting” Foreclosed on Houses

There are a few ways this one works. Sometimes the perpetrator is a con artist who works the scam much the same way as the scam we talked about above with vacation or seasonal homes. Other times, the homeowner themselves are the perpetrator. Facing foreclosure and feeling there are no other options, they’ll rent their home to an unsuspecting family and take the money to get their own home somewhere else. When the eviction date arrives, the new family will have no choice but to leave although in some cases, the bank will allow the new family to stay in the home for up to three months so they can try to find another place to live.

Another common foreclosure scam involved a fake agent selling a foreclosed on home. A fake agent will gain access to the home (often breaking in) and will take a family on a tour of the home. Often they offer a far lower than market value price on the home to entice buyers. When a buyer decides they are interested in the home, the fake agent will take a deposit and give the buyer a fake phone number. Some fake agents will actually take “deposits” from several buyers at once, all of whom will lose their money. After taking the deposit, the fake agent will have the buyer sign a fake property title deed (most of the time, but not all of the time) and promise to meet said buyer at the home on a specific date to give the buyer the keys to the home. When the buyer arrives on the agreed upon date, usually with moving trucks, the fake agent is nowhere to be found and the phone number doesn’t work. They can’t get into the home they think they purchased and before long, realize they’ve been the victim of a particularly cruel scam.

“Renting” Houses that are Legitimately For Sale

In this scam, a fake real estate agent will post a fake rental listing for a home that is actually for sale. They’ll offer the house at far less than it is worth to draw in potential buyers more quickly. Should the buyer ask about the low price, the fake agent will tell the buyer the person who owns the home has to rent out the property quickly because they are leaving the state for a job, school or something along those lines. The fake agent will take a deposit from any and all interested buyers, have the buyers sign fake rental agreements and will then disappear. This one is especially dangerous because it is often a multi-layer scam. Buyers may not just lose the deposit but the con artist may also use any information provided on the phony rental agreement to steal the potential buyer’s identity.

“Renting” Unavailable Apartments to Out of Town Renters

This is another big one and it is nearly impossible to catch the perpetrator. For this one, the con artist will target out of town renters who are looking for a temporary home while visiting a city for work on while on vacation. The con artist will list a real home for apartment as a temporary rental and then ask potential renters to wire money to cover the security deposit and rent. The renter then arrives at their destination and finds out the property they rented isn’t actually for rent and they have no place to stay. Making it even more difficult, it’s just about impossible to recover the money that was wired as it is incredibly difficult to trace.

How to Protect Yourself from Real Estate Scams

First and foremost, remember that old adage, “if it seems too good to be true, it probably is”. While there are great deals out there is real estate and you do sometimes come across dream opportunities, we all know that old saying for a reason – it’s usually true. Do your homework. Working with a real estate agent can be the best way to protect yourself against many of these scams but you need to do your homework. Make sure the agent you are working with is licensed. Check online reviews of your agent. Ask your agent questions. If someone you know has purchased a home or rented an apartment, ask if they used an agent, who that agent was and what their impressions were. Con artists rarely do legitimate sales or rentals so if your friend or family member got what they were promised from an agent, that agent is probably okay.

Second, avoid using cash or wiring money. It’s hard to trash cash or wired money. It’s much safer to use credit cards, checks or other forms of payment that can be easily traced should something go wrong. Even though you may be offered a receipt for cash transactions, that may not necessarily be enough to protect you. Insisting on writing checks or using credit cards or some other type of traceable payment form is often enough to scare off potential scam artists and sends the message that you’re an informed buyer, making you look like less of an easy target.


  1. DeeJaay Gladstone April 15, 2013 at 9:26 pm - Reply

    this was very helpful thank you

  2. Edward April 21, 2013 at 11:58 am - Reply

    In 2013 after what I view as the smoke and mirror real estate scam-a-thon of the past 15 years I again see real estate creeps trying to pawn off their overpriced garbage especially in California and Florida. I personally stay clear of real estate. I do not want a massive debt on my back that cannot ever be paid in an economy teetering on the edge of financial disaster.

  3. JOAN CROSBY-DUNBAR & CHERRYE CHERRY May 7, 2013 at 3:39 pm - Reply

    We need help. My daughter and I rented a house, we paid the listing agent a deposit, however the rent was due May 1, 2013. The listing agent never contacted us to get the rent. We moved into the property April 30, 2013. The pool was supposed to have been cleaned on May 4, 2013. We have not been able to hear from the listing agent. We have a so-called contract. Can you tell us what to do? A 70 yr. senior and a 48 daughter.

  4. brian July 25, 2013 at 8:10 pm - Reply

    Thanks for the tips……they were very helpful….

  5. angela November 21, 2013 at 2:55 pm - Reply

    was offered a dream beach house by one of the four owners in Spain, marvellous pictures, see view and all….. she wanted me to make a deposit of 10’000 euros in spain , to make the reservation, i did not pay, but whent there to see the dream house. THis house was nearly into the sea ( because not protected) is was robbed, windows open,doors open, no more electricity, no more kitchen,toilet etc… looked horrible, the place was not protected, no condominum at all, very dangerouse place. this person is still advertising her house all over, what to do???

  6. Terry McCauley February 4, 2014 at 8:00 pm - Reply

    Your article is excellent! My mother–who died in 2010–sold our Toronto family home to fraudulent Royal Lepage agents. Its present worth is approximately $650,000 and would have been mine. Instead, I am on disability and pleading with others for a place to live. It’s sad how our laws protect sleaze realtors.

    Recently, there’s been a rental ad in the same neighborhood. It’s been online for over a month. I called and was told I needed an appointment. Then, an application was e-mailed to me. When I could not contact the owners by phone, I sent another e-mail, which was ignored. I then called a former neighbor and asked him to inspect the property. He did so, telling me the house was under renovations and not occupied. I am skeptical–is it probable they are merely collecting names and deposits and will “disappear” before renovations are completed. Is this a rental scam. Your observations would be welcomed. –Terry

  7. disgruntled February 13, 2014 at 10:34 pm - Reply

    Anyone know anything about 540 wind sock way carlsbad california 90211. Perfect too good to be true opportunity for single mom n 3kids. I want to believe and wire money but I need to cover my own bum:)

  8. JP February 19, 2014 at 7:48 pm - Reply

    My neighbor caught “his” real estate agent quietly discussing how much more they could squeeze from the parties… very scary what is going on in the industry..

    my friend stopped them immediately and basically told them off..

  9. TCB April 17, 2014 at 1:47 pm - Reply

    with 11 million illegal residents here we are lucky we are not robbed daily, they have to get money somewhere and resort to anything to get
    money from anyone.
    use your brains and meet these people in there office to sign anything and research them on the internet and BBB. Good Luck

  10. susie martin May 4, 2014 at 1:54 am - Reply

    The real estate industry is full of scammers today never ever trust what a realtor tells you .They are liars check it out for your self .More realtors lose licenses through non disclosures than any thing else .

  11. Yisrael Ofman August 19, 2014 at 10:41 am - Reply

    Hi, I have an acquaintance who wants to give a property as a gift. So far I wasn’t asked to sign anything although we did need to go to the bank and present my passport to request certain documents witch didn’t arrive as of yet. My acquaintance does not want to approach a real estate professional. If this is a scam what are the possibilities?

  12. madame butterfly August 22, 2014 at 8:13 pm - Reply

    if your real estate agent buys and flips houses can he summit a contract to buy your house. if so how can i prove it.

  13. Chris Olufsen December 1, 2014 at 4:19 am - Reply

    I got sucked into making money flipping houses. They tell you only need to do this with hardly any work. You can have a house under contract and offer it to a buyer at a price they can make money on it. You don’t need to use your money and you can make big money.. they seem to be scams to me. What do you think?

  14. Linda December 30, 2014 at 5:12 pm - Reply

    what would or should i do if i believe this happen to me? where would I go or who would I talk to. i saw this on my credit report.

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