How to Avoid Real Estate Scams: A Homeowner’s Guide to Spotting Fraud Before It Costs You

The single most important rule in any real estate transaction: never send money based on wire instructions you received by email, and never accept a change to wire instructions without calling the recipient at a number you looked up yourself. That one habit prevents the largest category of loss in the entire industry.

Real estate is where ordinary people move the biggest sums of money they will ever move, often on a deadline, often with strangers, often over email. Criminals know this.

In 2025, the FBI’s Internet Crime Complaint Center received 12,368 real estate fraud complaints totaling $275.1 million in reported losses. That number badly understates the problem, because the closing-related wire fraud that hits homebuyers and sellers is usually counted under business email compromise, which accounted for $3.04 billion across 24,768 complaints and ranked second among all cybercrime categories by dollar loss.

This guide covers the scams that actually happen, how to spot each one, what to do in the first hour if you’ve been hit, and the specific free tools New York and Long Island homeowners can use to protect their property.

How Big the Problem Actually Is

Some context before the tactics, because the scale explains why criminals keep investing in this.

• The FBI logged 1,008,597 cybercrime complaints in 2025 with reported losses of $20.8 billion, a 26% increase year over year.
• 86% of business email compromise losses moved by wire transfer or ACH, which is why they’re so hard to reverse. Wires are fast and largely final.
• AI is now a factor. IC3 received more than 22,000 complaints referencing artificial intelligence in 2025, with losses exceeding $893 million. Chat tools now produce fluent, professional-sounding emails impersonating a title officer or an attorney, and voice cloning has made phone verification less reliable than it used to be.
• On the rental side, the FTC reports nearly 65,000 rental scams since 2020 with about $65 million in losses and a median individual loss of $1,000. About half of the scams reported in the year ending June 2025 started with a fake Facebook ad.
• The FTC also notes that because most fraud never gets reported to any government agency, these figures likely represent a fraction of the real harm.

One genuinely encouraging number: the FBI’s Financial Fraud Kill Chain intervened in 3,900 incidents in 2025, freezing $679 million of $1.16 billion in attempted thefts. That’s a 58% recovery rate, but it depends almost entirely on how fast the victim reports. More on that below, because it’s the most actionable thing in this article.

The Nine Real Estate Scams That Actually Happen

1. Closing wire fraud (business email compromise)

This is the big one. Highest dollar losses, most sophisticated execution, and the hardest to reverse.

How it works: A criminal gains access to the email account of a title company, attorney, real estate agent, or lender, sometimes weeks in advance. They read quietly and learn your closing date, your dollar amount, and how everyone in the transaction talks to each other. Days before closing, you receive an email that looks exactly like it came from your attorney or title company, with wire instructions attached. Sometimes it’s the real thread with a slightly altered reply-to address. You wire the money. It’s gone within minutes, usually routed through several accounts.

The FBI’s 2025 report describes a Missouri senior citizen who received a compromised email from what appeared to be the title company, containing wire instructions for over $1.3 million.

The tells:

• Wire instructions arriving by email, ever
• A last-minute change to instructions you already received
• Urgency: “we need this today to close on time”
• A sender address off by one character, or a display name that doesn’t match the actual address
• A request to keep the change confidential or to not call the office

How to avoid it:

• Never trust wire instructions in an email. Treat every set as unverified until confirmed by phone.
• Call to verify, using a number you independently looked up. Not the number in the email signature. Not a number in the attachment. Look up the firm yourself or use a number from a document you received in person weeks earlier.
• Ask a verification question only the real person could answer, given how good AI voice cloning has become.
• Ask your attorney or title company for a certified or bank check option instead of a wire. Slower, dramatically safer.
• Call the receiving bank after sending to confirm the funds landed in the correct account.
• Send a small test wire first on large transactions, confirm receipt, then send the balance.

2. Deed theft and home title theft

How it works: Someone forges a deed transferring your property into their name, or tricks you into signing one, then records it with the county. Once recorded, they may take out loans against the property, rent it out, or sell it to a buyer who has no idea. Victims frequently discover it only when a foreclosure notice, an eviction filing, or a strange tax bill arrives.

Targets skew heavily toward elderly homeowners, heirs to inherited property, out-of-state owners, and owners of vacant or high-equity homes with no mortgage. In March 2026, the FBI’s Operation Hard Money resulted in charges against eleven defendants in Southern California who allegedly stole identifying information from elderly homeowners and used it to secure fraudulent loans against properties, with documented losses around $6 million and intended losses exceeding $17 million.

How to protect yourself in New York:

New York now has some of the country’s strongest deed theft laws. Legislation signed in November 2023 (S.6577/A.6656) lets the Attorney General and district attorneys pause evictions and ownership proceedings while a deed theft case is investigated, and expanded the crimes that let prosecutors invalidate fraudulent documents. A further law in July 2024 classified deed theft as grand larceny, extended the statute of limitations, and gave the Attorney General original criminal jurisdiction.

Free monitoring tools, which every Long Island homeowner should sign up for today:

• Nassau County: Property Fraud Alert
• Suffolk County: Homeowner Watch List
• New York City: check ACRIS at least once a year for documents recorded against your property

These services notify you by email or text whenever a document is recorded in your name. They cost nothing and take a few minutes to set up. The FBI specifically recommends enrolling in county notification services as a primary defense.

Also:

• Buy an owner’s title insurance policy when you purchase, and keep it. A one-time cost that protects against forgery and fraud in your chain of title and typically covers legal costs to restore your ownership. Check whether yours includes post-policy protection.
• Never sign anything transferring an interest in your home without a real estate attorney reading it first. This includes adding a family member to your deed, signing a “temporary” transfer, or anything presented to you during a foreclosure.
• If you own vacant property or an inherited house you don’t visit, check the tax records annually. Nobody else is watching.

3. Seller impersonation fraud

How it works: A criminal identifies a property, usually vacant land or an empty house with no mortgage, researches the real owner through public records, and fabricates an identity to match: fake driver’s license, email address, and VoIP phone number. They approach a real estate agent, list the property they don’t own, accept a quick cash offer, arrange a remote notary they control, and disappear with the proceeds.

This is one of the fastest-growing schemes in the industry. According to NAR’s 2025 deed and title fraud survey, 62% of title fraud cases involve vacant land, while only 12% involve owner-occupied homes. A 2023 CertifID survey found 54% of real estate professionals had encountered at least one seller impersonation attempt within six months.

Red flags, whether you’re a buyer or an agent:

• The seller will only communicate by text, email, or a VoIP number, and refuses in-person or live video meetings, usually citing illness, travel, or a family emergency
• The seller insists on a cash buyer specifically
• The property is priced noticeably below market
• The seller wants a remote notary, and wants to choose the notary
• The seller won’t attend closing and wants to sign electronically
• The seller asks for proceeds to be sent directly to them rather than through normal channels
• Documents notarized in a foreign country, or unusual paperwork

How to avoid it as a buyer: visit the property in person, since only a real owner can get your agent the key. Insist on a trusted in-person notary at closing chosen by your side. Buy title insurance. If something feels off, send a certified letter to the owner’s address on the tax record and see who responds.

4. Rental scams

How it works: Scammers copy a real listing, swap in their own contact information, and post it on a different site. Many copy listings for homes that are actually for sale, not for rent. Then they pressure you to send an application fee, deposit, or first month’s rent before you’ve seen the place.

Some run a more sophisticated version using self-guided tour services: they copy a listing from a landlord who uses lockbox self-tours, then send you a code so you can walk through and convince yourself it’s real.

Signs of a rental scam:

• The landlord won’t meet you in person or show the property themselves
• Pressure to pay before seeing the unit
• Rent noticeably below market for the area
• Payment requested by wire, gift card, cryptocurrency, or a payment app
• Requests for your Social Security number, driver’s license photo, and paystubs very early in the process
• A push to prove creditworthiness by clicking their link for a cheap credit check, which frequently enrolls you in a recurring paid membership
• The same address listed elsewhere at a different price, with different contact info, or listed for sale

How to avoid it: search the property address independently. Look up the owner in county tax records and confirm the person you’re dealing with matches. See the inside in person with someone who can prove they control it. Never pay by irreversible methods. Trust the mismatch when the story and the paperwork don’t line up.

5. Fake real estate agents and unlicensed operators

How it works: Someone presents themselves as a licensed agent or broker, sometimes using a real licensee’s name, photo, and license number lifted from a legitimate site. They collect deposits, application fees, or “listing fees,” then vanish.

How to avoid it: verify the license yourself through the New York Department of State’s public license lookup. Search by name and confirm the person in front of you matches the record, including brokerage. Call the brokerage’s main office at a number you looked up independently and confirm the agent works there. A real agent will not be remotely offended by this.

The same applies to attorneys. Confirm the person is admitted to practice in New York and check for disciplinary history.

6. Fake cash buyers and the wholesaler bait-and-switch

This one is worth spelling out plainly, since our own industry is where it lives.

How it works: Someone presents themselves as a cash buyer. In reality they’re a wholesaler: they put your house under contract with no intention of buying it, then try to sell that contract to an actual investor for a markup, commonly $5,000 to $20,000 and sometimes far more. That markup comes out of your proceeds. If they can’t find an end buyer, they walk, and you’ve lost weeks with your house off the market.

A related version is the bait-and-switch: a strong opening offer to get you under contract and off the market, followed by “discovered” problems and a renegotiated price once you have no alternatives left.

The tells:

• The contract names the buyer as “XYZ LLC and/or assigns,” or contains a clause letting the buyer assign the agreement at their discretion, usually buried near the end
• No proof of funds in their own company’s name
• They never walk the property before making an offer
• A closing window longer than 30 days on a supposedly cash deal
• Minimal or no earnest money deposit
• A vague or 30-day inspection period rather than the normal 7 to 10 days
• An offer that seems too good. Nobody can profit buying an as-is house that needs work at 90% to 100% of market value. An unusually high number is often the setup for a renegotiation.
• Pressure to sign today
• Any request for money from you up front. Legitimate buyers never ask a seller for fees before closing.

How to avoid it: ask directly whether they will be the entity on the deed at closing. Ask for proof of funds. Ask whether the contract contains an assignment clause. Get more than one offer. And have a New York real estate attorney read the contract before you sign, not after. Attorneys in Nassau and Suffolk see these agreements constantly and spot an assignment clause in seconds.

Wholesaling itself is legal. Misrepresenting yourself as a direct buyer when you aren’t is the problem.

7. Foreclosure rescue and equity stripping

How it works: Homeowners in default are targeted with promises to stop the foreclosure, negotiate with the lender, or “temporarily” take title until they can refinance. The seller signs paperwork they don’t fully understand, and the deed transfers permanently. Others charge large upfront fees for loan modification services never delivered.

These schemes cluster around people under maximum financial stress with the least capacity to get good advice.

New York protection worth knowing: the Home Equity Theft Protection Act (HETPA) regulates purchases of residential property from homeowners who are in foreclosure or default. It imposes requirements on the purchaser, including a written contract in a specified form and a cancellation right for the homeowner. In 2025, the Attorney General secured the first criminal conviction under HETPA, against a former real estate agent who forged a homeowner’s signature on a deed while her home was in foreclosure.

If you are in foreclosure and someone offers to buy your house, this law applies to that transaction. Ask your attorney to walk you through your HETPA rights specifically. A legitimate buyer will already be following it.

Never: pay upfront fees for foreclosure help, sign a deed you haven’t had a lawyer review, or make mortgage payments to anyone other than your servicer.

8. Earnest money and escrow diversion

How it works: A fake escrow account, or wire instructions redirecting your deposit to a criminal. Sometimes the “escrow company” doesn’t exist at all, complete with a professional website built the previous week.

How to avoid it: verify the escrow or title company independently. Check that it’s licensed. Confirm wire instructions by phone using a number you sourced yourself. In New York, your attorney typically holds the down payment in escrow, which removes much of this risk, so be immediately suspicious of any arrangement that routes your deposit somewhere unusual.

9. The overpayment and fake-buyer check scam

How it works: A “buyer,” often claiming to be overseas or relocating, sends a check or cashier’s check for more than the agreed amount, then asks you to refund the difference or forward it to a third party such as a moving company. The original check bounces days or weeks later, after your bank has already made the funds available. You’re liable for the full amount.

How to avoid it: never refund or forward money from a check that hasn’t fully and finally cleared. “Funds available” is not the same as “cleared.” Ask your bank directly. And treat any buyer who overpays as a scam by default, because legitimate buyers don’t.

Universal Red Flags: The Pattern Behind Every Real Estate Scam

Different schemes, same underlying structure. If you learn nothing else, learn this list.

• Urgency. “Today only.” “We’ll lose the closing date.” Manufactured time pressure exists specifically to stop you from verifying. Legitimate parties want you confident, not cornered.
• Irreversible payment methods. Wire, gift cards, crypto, payment apps. Real transactions can accommodate a certified check.
• Refusal to meet in person. Illness, travel, deployment, a family emergency. There’s always a reason.
• Instructions delivered only by email, especially anything financial.
• A change to previously agreed payment details. This is the highest-alert event in any transaction. Assume compromise until you’ve verified by phone.
• Numbers that don’t make sense. Rent well below market. A cash offer well above what the math supports. Both are bait.
• Pressure not to involve a lawyer, or to use “their” attorney, notary, or title company exclusively.
• Any request for money before closing.
• Documents you’re asked to sign without time to read.

How to Verify Everyone in Your Transaction

Take twenty minutes. It’s the cheapest insurance in real estate.

Who Gets Targeted Most

Fraudsters look for specific conditions. If you recognize yourself here, tighten up.

• Elderly homeowners, particularly those living alone with substantial equity. FTC data shows total fraud losses among adults 60 and older have risen sharply since 2020.
• Heirs to inherited property, who often don’t live nearby, may not know the property’s status, and are dealing with an unfamiliar process during grief.
• Out-of-state owners who can’t easily check on a property.
• Owners of vacant homes or vacant land, especially with no mortgage. High equity, low attention, no tenant or neighbor to notice.
• Homeowners in foreclosure, whose distress is public record and who get contacted relentlessly.
• First-time buyers and sellers who don’t know what normal looks like.
• Younger renters. The FTC found people ages 18 to 29 were three times more likely than other adults to report losing money to a rental scam.

If an elderly parent or relative owns a home, enroll their property in the county fraud alert service and check the tax records annually. It takes minutes and it’s one of the highest-value things you can do for them.

If You’ve Already Been Scammed: The First 24 Hours

Speed determines whether you get your money back. The FBI’s Financial Fraud Kill Chain froze $679 million out of $1.16 billion in attempted thefts in 2025, but the process only works if the wire is recent and reported immediately.

Do these in this order, right now:

1. Call your bank’s fraud department immediately and request a wire recall or SWIFT recall. Minutes matter. Do this before anything else, including before you finish reading this.
2. Call the receiving bank and report the fraudulent transfer.
3. File a complaint at ic3.gov with full transaction details: dates, amounts, account numbers, routing numbers, and the receiving bank’s name. Include everything. This is what triggers the Kill Chain process.
4. Call your local FBI field office.
5. Contact your real estate attorney.
6. Report to the New York Attorney General. For deed theft specifically: 1-800-771-7755 or deedtheft@ag.ny.gov, or file a confidential complaint through the AG’s website.
7. File a police report with your local department. Nassau and Suffolk both have units that handle this.
8. Report to the FTC at reportfraud.ftc.gov.
9. If your identity was used, place a fraud alert with the credit bureaus and freeze your credit.
10. Preserve everything. Every email with full headers, every text, every document, every phone number. Don’t delete anything, including messages that embarrass you.

File regardless of the amount. Small reports build the pattern that lets investigators connect cases, and the same receiving account is often used against multiple victims. The FBI report notes a case where freezing one account for a $1.3 million real estate wire led to stopping a separate $6 million attempt against a government office.

Where to Report in New York

Frequently Asked Questions

What is the most common real estate scam?

By dollar loss, closing wire fraud carried out through business email compromise. The FBI logged $3.04 billion in BEC losses across 24,768 complaints in 2025, and real estate closings are among the most-targeted transaction types. By volume, rental scams affect more people, with nearly 65,000 reported to the FTC since 2020.

How do I know if a real estate agent is real?

Look them up in the New York Department of State’s public license database, then call their brokerage’s main number, which you found independently, to confirm they work there. Scammers frequently use real agents’ names and license numbers.

Can someone steal my house?

They can record a forged deed transferring title, which creates a serious legal mess even though it’s ultimately voidable. Vacant, high-equity, and inherited properties are the most common targets, with 62% of title fraud cases involving vacant land. Enroll in your county’s free property fraud alert service and keep an owner’s title insurance policy.

Is home title lock insurance worth it? Paid title monitoring services generally do what your county’s free alert service already does: tell you when a document is recorded. An owner’s title insurance policy from your purchase is the product that actually pays to defend and restore your ownership. Start with the free county alerts and confirm what your existing title policy covers before buying a subscription.

What should I do if wire instructions change at the last minute?

Stop. Do not send anything. Call the sender at a phone number you look up yourself, never one from the email, and verify. A last-minute change to payment details is the single strongest indicator of compromise in a real estate transaction.

Are “we buy houses” companies a scam?

Many are legitimate businesses. The real risk isn’t outright fraud so much as wholesalers who present themselves as buyers, tie up your house, and assign the contract for a markup taken out of your proceeds. Ask whether they’ll be the entity on the deed, demand proof of funds in their own name, check the contract for an assignment clause, and have an attorney review it.

How can I tell if a cash offer on my house is fake?

Ask for proof of funds in the buyer’s own entity name. Confirm they walked the property before offering. Check for “and/or assigns” language. Be suspicious of a closing window over 30 days, minimal earnest money, or an offer well above what an as-is purchase could support. Get a second offer to compare against.

What are the signs of a rental scam? The landlord won’t meet you or let you inside, they want money before you see the place, the rent is below market, they want payment by wire or gift card, they ask for your Social Security number and ID early, or the same address appears elsewhere at a different price or for sale rather than rent.

Does title insurance protect against deed fraud?

An owner’s policy typically protects against forgery and fraud in the chain of title and covers legal costs to clear title and restore ownership. Coverage varies, so read your policy and ask whether it includes post-policy protection. A lender’s policy protects the lender, not you.

How do I protect an elderly parent’s home from deed theft?

Enroll the property in the Nassau County Property Fraud Alert or Suffolk County Homeowner Watch List, check the county tax and deed records annually, confirm they have an owner’s title insurance policy, and make sure they never sign anything affecting the deed without an attorney reviewing it first. Deed theft disproportionately targets older homeowners.

Can I get my money back after a wire fraud?

Sometimes, if you act within hours. The FBI’s Financial Fraud Kill Chain froze 58% of the funds in the cases it worked in 2025. Call your bank’s fraud department first, then file at ic3.gov with complete transaction details. Every hour reduces your odds.

The Bottom Line

Real estate fraud isn’t clever. It works because it arrives at the exact moment you’re busy, stressed, moving a large amount of money, and inclined to trust the people around you.

Three habits prevent most of it:

1. Verify wire instructions by phone, every time, using a number you looked up yourself.
2. Enroll your property in your county’s free fraud alert service and never sign anything touching your deed without an attorney.
3. Slow down when someone is rushing you. Manufactured urgency is the common thread in nearly every scheme described above. The pressure to decide right now is itself the warning.

And if something has already gone wrong, report it today rather than tomorrow. The recovery data is genuinely encouraging for people who move fast and grim for people who wait.