Top 5 Ways to Identify Real Estate Scams

Real estate scams are widespread throughout the industry — and show no sign of slowing down. According to the government’s latest IC3 report, over $145 million was lost in real estate scams in 2023 alone. 

Most people save for years to purchase one of the biggest investments of their lifetime, a new home. So, to have it wiped away amidst a real estate scam can be devastating. 

While buyers and sellers need to be aware of this threat, it is up to those in the industry, such as lenders, title agencies, and title agents to take the necessary steps to safeguard customer transactions. 

Stay in the know with these top 5 ways to identify real estate scams. 

1. Last-Minute Changes

Email phishing is one of the most commonly used tools to scam a real estate transaction. This is when a hacker gains access to your email or software system and becomes privy to the details of the sale. 

They then create a fake email to look like someone involved in the process, requesting that the wire transfer be sent to another account number. This is often done last minute. And, because the email usually looks and sounds legit, many recipients don’t think twice about verifying the change — even though they should. 

2. Pressure to Take Urgent Action

Homebuyers are often eager to close and sellers just want to get to the closing so that they can move on to their next chapter in life. Therefore, it is not uncommon for title agents to feel the pressure to move files along through the title process and get to the closing table. 

However, pressure tactics that are used to create a sense of urgency without the proper course of action should be a red flag. As much as everyone wants to be done with the process, nobody is going to want to overlook certain discrepancies — unless there is something else going on. 

Don’t fall for the pressure. 

3. Questionable Documentation

Title agents count on title searches to help them clear the title for closing. This often involves a lot of documents. Forged signatures, dates that don’t align, or other inconsistencies can signal that real estate fraud has occurred (or is occurring) with this property. 

When something doesn’t add up, don’t overlook it. Instead, dig deeper. 

4. Inability to Verify the Owner

Owner impersonation is another very common real estate scam that is taking place. This is when someone pretends to be the actual owner of the property, knowing personal details that try to prove they are the owner. 

Title agents can protect buyers from this scam by taking steps to verify the seller’s identity through the title search as well as through identity verification technology. Requiring in-person notarization is also highly effective. 

5. Unconventional Transaction Details

Finally, unconventional transaction details can signal that something may be amiss with the transaction. For instance, selling the property for an amount that is considerably lower than market value could be cause for concern. 

There are legitimate situations in which this may happen, but if you come across this or any transaction details that don’t seem right, extra digging before the closing date is warranted. 

Secure Your Title Processes with FNTI

There are so many different types of real estate scams taking place. Educating yourself, being proactive, and implementing secure practices will help you to protect your customers.  

At First National Title Insurance Company, we offer title production services that are safe and efficient and training to keep you up-to-date on all the steps you can take to protect against fraud. 
Learn more today.