Buying a home is one of the biggest money choices you’ll ever make. Sadly, bad people know this and try to steal from home buyers every day. In 2024, real estate crimes cost people over $173.5 million, which is much more than the year before.
But don’t worry. You can protect yourself. This guide will show you how to spot the tricks scammers use and keep your money safe. We’ll walk through the most common scams, what to watch for, and simple steps to stay protected during your home buying journey.
What Are Home Buying Scams?
Home buying scams happen when bad people pretend to be real estate agents, sellers, or other pros in the house buying process. Their goal is simple: steal your money or personal info.
About 1 in 20 Americans who bought or sold a home in the past three years have been victims of real estate fraud, with losses often exceeding $70,000. That’s a lot of money to lose, and it’s why learning to spot these scams is so important.
These scams work because buying a home is confusing. There are many steps, lots of papers to sign, and big amounts of money moving around. Scammers use this confusion to trick people.
Why Home Buying Scams Are Growing
Real estate scams are happening more and more each year. FBI Special Agent Siobhan Johnson called real estate fraud “one of the fastest growing cyber scams across the country”.
Here’s why these scams keep growing:
- More online buying: People now buy homes without seeing them in person, which makes it easier for scammers to hide
- Better fake tools: Bad guys use computers to make fake emails and websites that look real
- Big money involved: Home sales involve lots of cash, making them a tempting target
- Complex process: The home buying process has many steps, giving scammers more chances to jump in
Reports of vacant land fraud have increased by 500% over the last four years, showing just how fast these crimes are spreading.
The Most Common Home Buying Scams
Let’s look at the tricks scammers use most often. Knowing these will help you spot trouble before it starts.
Wire Transfer Fraud
This is the number one scam you need to watch for. Wire fraud affected nearly 14,000 people in 2020 alone.
How it works: A scammer pretends to be your real estate agent, title company, or lawyer. They send you an email with new bank info for sending your down payment or closing costs. The email looks real, but it’s fake. When you send the money, it goes straight to the scammer instead of the right place.
Warning signs:
- Last-minute changes to wire instructions
- Emails asking you to wire money quickly
- Email addresses that look almost right but have small changes
- Phone numbers that seem off by one or two digits
How to protect yourself:
- Never trust wire instructions sent by email alone
- Always call your real estate agent or title company using a phone number you already have (not one from the email)
- Ask them to confirm the bank account info in person or over the phone
- If you wire money to a scammer, call your bank or wire service immediately and request a halt on the transfer
Fake Property Listings
Scammers steal photos and information from actual listings and then pose as the seller or a seller’s agent. They post these fake listings on websites that don’t check if listings are real.
How it works: You find a great house online at a good price. The “seller” says they need money fast and asks you to wire a deposit to hold the property. After you send the money, the seller disappears. The real owner never even knew their home was being used in a scam.
Warning signs:
- Prices way lower than other homes nearby
- Seller pushes you to act fast
- Requests for money before you see the home
- Seller claims to be out of the country
- No in-person meetings allowed
How to protect yourself:
- Always verify a property’s status in person. Look for a legitimate “For Sale” sign or any indication that the home is actually on the market
- Run a reverse image search on listing photos
- Check if the same house appears on multiple sites with different contact info
- Never send money before seeing a property in person
- Work with a licensed real estate agent
The “Too Eager” Buyer Scam
Sometimes the scam works the other way. If you’re selling your home, watch out for buyers who seem strangely excited about your property.
How it works: A buyer contacts you offering to buy your house, makes an offer over your asking price, promises to send earnest money into an account, and then runs a cashier’s check or wire fraud scam.
Warning signs:
- Buyer wants to purchase sight unseen
- Offers more than you asked for
- Refuses to meet in person or video chat
- Won’t talk on the phone, only emails or texts
- Sends you way too much personal financial info upfront
- Claims to be overseas
How to protect yourself:
- Work with a real estate agent who can screen buyers
- Be suspicious of cashier’s checks from unknown buyers
- Never accept overpayment and send money back
- Insist on meeting buyers or their agent in person
Foreign Buyer Scams
This old trick still works on many people.
How it works: Someone contacts you saying they desperately want to buy your home but they’re currently overseas. They offer to send a cashier’s check right away. A few days after you deposit the check, they contact you with a sad story about how their plans changed. They ask you to refund part of the money. By the time you find out the check was fake, your real money is gone.
Warning signs:
- Buyer claims to be in another country
- Offers a cashier’s check without seeing the home
- Asks for a refund shortly after sending payment
- Story sounds dramatic or urgent
How to protect yourself:
- Know that cashier’s checks can be fake
- Wait for checks to fully clear before taking any action (this can take weeks)
- Be extra careful with overseas buyers
- Use a real estate agent to handle the sale
Bait and Switch Scams
Unsavory real estate professionals will “hook” you with an appealing property or price before attempting to sell you on a completely different one.
How it works: You call about a great house you saw online. The agent says it just sold, but they have another property to show you. This “other property” is usually more expensive or in worse shape. Some agents keep doing this to pressure you into buying something you don’t want.
Warning signs:
- Perfect listings that are “just sold” when you call
- Agent quickly pushes other, pricier homes
- Properties shown are much different than advertised
- High-pressure sales tactics
How to protect yourself:
- Research agents before working with them
- Read online reviews
- Ask for additional pictures before visiting
- Get offers in writing
- Walk away if you feel pressured
Home Inspection Scams
Some scammers pose as licensed inspectors to take advantage of trust. These individuals may rush through inspections, skip major areas, or intentionally hide serious issues.
How it works: A fake or dishonest inspector either misses big problems with the house or works with the seller to hide them. You buy the home thinking it’s fine, only to discover expensive problems later.
Warning signs:
- Inspector rushes through the job
- Skips hard-to-reach areas like attics or crawl spaces
- Report comes back too quickly
- Inspector is evasive about their experience
- Won’t let you attend the inspection
How to protect yourself:
- Always verify your inspector’s license and credentials
- Read reviews from past clients
- Attend the inspection yourself
- Ask lots of questions during the inspection
- Get a detailed written report
- Don’t use an inspector recommended by the seller alone
“We Buy Houses for Cash” Scams
Not all cash home buyers are scammers. Many are legitimate businesses, like We Buy Colorado, that help people sell homes quickly. But some bad actors use this model to steal from desperate homeowners.
How it works: Scammers offer to buy your house for cash but ask you to sign over the deed before paying you. Or they promise to buy your home but then add hidden fees that weren’t in the original offer. Some even convince you to sign over your home while you stay responsible for the mortgage.
Warning signs:
- Asking for upfront fees before buying
- Pressure to sign papers quickly without reading them
- Requests to sign the deed before receiving payment
- No physical office or business address
- Can’t find reviews or references
- Promises that sound too good to be true
How to protect yourself:
- Research the company thoroughly online
- Check the Better Business Bureau for complaints
- Read reviews from past sellers
- Ask for references and call them
- Never sign the deed before getting paid
- Have a lawyer review any contracts
- Trust your gut if something feels wrong
If you need to sell your house fast, work with established companies that have verified track records and good reviews.
Rental and Moving Scams
Even after you buy a home, scammers might target you during your move.
How it works: Fake moving companies give you a low quote, then jack up the price once your stuff is loaded on the truck. Some even hold your belongings hostage until you pay more. Others take your deposit and never show up.
Warning signs:
- Very low quotes compared to other movers
- No physical address listed
- Requests for large upfront payments
- No proper insurance information
- Asks for payment in cash or gift cards
How to protect yourself:
- Get quotes from multiple moving companies
- Read reviews carefully
- Verify the company is registered with the Federal Motor Carrier Safety Administration (for interstate moves)
- Don’t pay the full amount upfront
- Use credit cards when possible (better protection than cash)
Red Flags That Signal a Scam
Some warning signs show up in almost every real estate scam. Learn to spot these red flags:
Pressure to Act Fast
Real estate can move quickly, but legitimate deals won’t pressure you to skip important steps. If someone’s pushing you to act fast, sign now, wire money today, or skip the usual steps, that’s a red flag.
Take your time. Read everything. Ask questions. A real seller or buyer will understand.
Changes at the Last Minute
Any time the process shifts without clear reasons or updated paperwork, pause. Scammers often try to confuse you by changing details at the last second.
If wire instructions change, bank accounts change, closing dates move suddenly, or new fees appear out of nowhere, stop and verify everything before moving forward.
Requests for Unusual Payments
Professionals in the real estate industry don’t ask for cash payments. Nor do they ask you to pay in cryptocurrency or gift cards.
Normal home transactions happen through:
- Wire transfers (but verify details carefully)
- Checks
- Credit or debit cards
If someone asks for cash, gift cards, cryptocurrency, or money-wiring services like Western Union, that’s a huge red flag.
Can’t Verify Their Identity
You should be able to verify any agent, buyer, or company involved. Can’t find their license? No online reviews? No local business address? That’s a red flag.
Legitimate real estate professionals are licensed and easy to verify. They have:
- A physical office address
- A license you can look up
- Online reviews
- A history you can check
- References they’re happy to share
Communication Feels “Off”
Trust your gut. If emails have spelling mistakes, the person won’t video chat or meet in person, or their story doesn’t add up, be careful.
Some signs to watch for:
- Email addresses that look slightly wrong
- Grammar and spelling errors
- Refusal to meet in person
- Story changes each time you talk
- Vague answers to specific questions
How to Protect Yourself from Home Buying Scams
Now that you know the scams, let’s talk about how to stay safe. These simple steps will protect you:
Work with Trusted Professionals
The best protection is working with licensed professionals who have good reputations.
For buyers:
- Hire a licensed real estate agent with good reviews
- Use a reputable title company
- Work with established mortgage lenders
- Choose inspectors with verified licenses
For sellers:
- List with a licensed agent
- Be wary of unsolicited offers
- Verify buyers through your agent
- Use a reputable title company
If you’re facing foreclosure or need to sell quickly due to divorce, work with established companies that can verify their legitimacy.
Verify Everything Independently
If someone contacts you asking you to send your escrow money to a new account, take a closer look and make sure the email address or text number is real.
Never trust info that comes from just one source, especially emails. Here’s how to verify:
For wire transfers:
- Get wire instructions in person or over the phone
- Call your agent or title company using a number you already have
- Never use contact info from an email
- Confirm bank account details match exactly
- Double-check again before sending money
For people and companies:
- Look up licenses on official state websites
- Check the Better Business Bureau
- Read reviews on multiple sites
- Ask for references and actually call them
- Search for complaints online
Never Rush
Take your time with every step. Scammers rely on you acting fast without thinking.
- Read all contracts carefully
- Ask questions about anything you don’t understand
- Get a lawyer to review important papers
- Sleep on big decisions
- Don’t let anyone pressure you
If you’re dealing with an inheritance or need to relocate quickly, legitimate buyers will give you time to make smart choices.
Protect Your Personal Information
Because so much of your personally identifiable information will be changing hands, it’s important to understand who will have access to it and why they need it.
Tips to protect your info:
- Only share sensitive details with verified professionals
- Ask how companies will protect your data
- Use secure websites (look for “https” in the address)
- Don’t email financial information
- Keep your credit frozen when not actively applying for loans
- Be careful on public Wi-Fi when sharing documents
Document Everything
Keep records of all communications and transactions.
- Save all emails
- Keep copies of contracts
- Record phone conversations (if legal in your state)
- Take photos of documents
- Note dates and times of conversations
- Keep receipts for all payments
If something goes wrong, these records will help you report the scam and possibly recover your money.
Use Secure Payment Methods
Wire transfers, credit or debit cards, or checks create a paper trail. This protects both you and the other party.
Safe payment methods:
- Wire transfers (after verifying instructions)
- Checks
- Credit cards (offer buyer protection)
Unsafe payment methods:
- Cash
- Gift cards
- Cryptocurrency
- Wire services like Western Union (for strangers)
- Money orders to unknown people
What to Do If You Spot a Scam
If you think you’ve found a scam, act quickly.
Stop All Communication
Don’t send any more money or information. Stop talking to the scammer right away.
Call Your Bank
If you’ve already sent money, call your bank or wire service immediately and request a halt on the transfer. The faster you act, the better chance you have of getting your money back.
Report the Scam
Help protect others by reporting scams to:
Federal agencies:
- FBI Internet Crime Complaint Center (IC3): www.ic3.gov
- Federal Trade Commission: reportfraud.ftc.gov
- Consumer Financial Protection Bureau: consumerfinance.gov/complaint
Local resources:
- Your local police department
- Your state attorney general’s office
- Your state real estate commission
For specific scam types:
- Wire fraud: Contact the FBI immediately
- Email scams: Forward to spam@uce.gov
- Text scams: Forward to 7726 (SPAM)
- Phone scams: Add your number to the Do Not Call Registry
Get Legal Help
If you’ve lost money, talk to a lawyer who knows about real estate fraud. They can help you understand your options and might help you recover losses.
Warn Others
Share your experience to help protect other people. Post reviews online, tell your real estate agent, and warn friends who might be buying or selling homes.
Special Situations That Attract Scammers
Some home sellers are bigger targets for scams. If you’re in one of these situations, be extra careful:
Facing Foreclosure
Scammers target people behind on mortgages with fake “foreclosure relief” offers. They promise to stop foreclosure for an upfront fee or ask you to sign your deed over to them.
What to do instead: Talk directly to your lender about payment plans or loan modifications. If you need to sell fast to avoid foreclosure, work with verified cash buyers who have proven track records.
Inherited Property
People who inherit homes often don’t know the property’s value and might accept too-low offers or fall for fake buyer scams.
What to do instead: Get the property appraised, research market values, and take your time deciding whether to sell. If you choose to sell an inherited property, work with licensed agents or established buyers.
Vacant Land
FBI Newark has reported a 500% increase in vacant land fraud over the last four years. Scammers impersonate landowners and sell property they don’t own.
What to do instead: Check your property records regularly. If you get unexpected offers, verify the buyer’s identity carefully. Use a title company for all sales.
Properties Needing Repairs
If your home needs repairs, you might feel pressure to accept a low offer or rush into a deal.
What to do instead: Get multiple offers, research cash buyers thoroughly, and remember that legitimate buyers understand you need time to make good decisions.
Tired Landlords
Landlords who want out might jump at quick-sale offers without checking if they’re legitimate.
What to do instead: Research buyers carefully, get multiple offers, and don’t let exhaustion make you rush into a bad deal.
Questions to Ask Before Sending Money
Before you wire money or sign anything, ask these questions:
About wire transfers:
- Can I verify these bank details over the phone?
- Have these wire instructions changed from what we originally discussed?
- Can I come to your office to get these details in person?
- Why do I need to wire money so quickly?
About the buyer or seller:
- Can you provide your license number?
- Do you have references I can call?
- Can we meet at your office?
- What company do you work for?
- Can I verify your identity with that company?
About the property:
- Can I see the home in person?
- Can you provide proof you own this property?
- Why is the price so much lower (or higher) than other homes?
- Can I bring a home inspector?
About the contract:
- Can I have a lawyer review this?
- Can you explain this clause?
- What happens if I need more time?
- Are there any hidden fees?
- What’s your refund policy?
If you don’t get clear, helpful answers to these questions, walk away.
Tools and Resources to Stay Safe
Use these resources to protect yourself:
Verification Tools
- Real estate license lookup: Check your state’s real estate commission website
- Better Business Bureau: www.bbb.org
- Reverse image search: Google Images or TinEye
- Property records: County assessor’s website
- Company verification: Secretary of State business search
Educational Resources
- FBI’s real estate fraud information: www.fbi.gov
- Federal Trade Commission consumer info: consumer.ftc.gov
- Consumer Financial Protection Bureau: consumerfinance.gov
Protection Services
- Credit freeze: Freeze your credit with all three bureaus (Equifax, Experian, TransUnion)
- Fraud alerts: Set up alerts with your bank and credit cards
- Do Not Call Registry: www.donotcall.gov
- Email filters: Use spam filters and report phishing
How Legitimate Cash Buyers Work
Since we’ve talked a lot about scams, let’s clarify how honest cash home buyers operate. This will help you tell the difference.
What Real Cash Buyers Do
Legitimate companies like We Buy Colorado follow a clear, transparent process:
- Free evaluation: They look at your property and give you a fair offer with no obligation
- Transparent offer: The offer is clear, with no hidden fees
- Time to decide: They give you time to think and consult with family or a lawyer
- Simple paperwork: Contracts are straightforward and you can have them reviewed
- You choose closing: You pick the closing date that works for you
- No pressure: They never push you to sign quickly
Red Flags vs. Legitimate Practices
Red flags (scam):
- Asks for upfront fees
- Pressures you to sign immediately
- Won’t let you review contracts
- Has no physical office
- Can’t provide references
- Demands you sign deed before payment
Legitimate practice:
- No upfront fees
- Gives you time to decide
- Encourages you to review everything
- Has a real office you can visit
- Provides references happily
- Pays before taking the deed
Why People Choose Cash Buyers
Understanding why legitimate cash buyers exist helps you see the difference between helpful companies and scammers.
People often sell to cash buyers when they:
- Need to sell very quickly
- Have a home that needs lots of repairs
- Want to avoid real estate agent fees
- Are behind on mortgage payments
- Don’t want to deal with showings and open houses
If this sounds like your situation, you can work with cash buyers safely. Just do your homework first. Check reviews, verify the business, and don’t rush.
Learn more about how it works with legitimate cash buyers and what to expect from the process.
Real Stories, Real Lessons
Understanding real scam cases helps you spot them in your own situation.
The Email That Cost $42,000
Jenna Carlson lost $42,000 when scammers impersonated her real estate agent’s paralegal. After the fraud was discovered, Jenna realized the scammer was using an email address similar to the paralegal’s — but with two extra letters in it.
The lesson: Always check email addresses carefully. Look at every character. One wrong letter can cost you thousands.
The Stolen Land
A property owner found out that her land was fraudulently sold when the new owner showed up with construction equipment.
The lesson: Check your property records regularly, even for land you own but don’t live on. Scammers target vacant properties because owners might not notice right away.
The Saved Transaction
The FBI’s Recovery Asset Team froze a fraudulent bank account after a couple wired $956,342 to buy property, stopping the transfer and returning $955,060 to the victims.
The lesson: Act fast if you realize something is wrong. Call your bank immediately. Sometimes money can be recovered if you act within hours.
Final Thoughts
Home buying scams are scary, but you don’t have to be a victim. The key to staying safe is simple: slow down, ask questions, and verify everything.
Remember these main points:
- Never rush: Scammers use pressure and urgency. Take your time
- Verify independently: Don’t trust info from just one source. Check everything
- Work with licensed pros: Use real estate agents, lawyers, and title companies with good reviews
- Protect your info: Be careful who gets your personal and financial details
- Trust your gut: If something feels wrong, it probably is
Buying a home should be exciting, not scary. By knowing these scams and how to spot them, you can move forward with confidence.
If you need to sell your home quickly in Colorado for any reason, We Buy Colorado offers a straightforward, transparent process. We provide fair cash offers with no hidden fees, no pressure, and no scams. You can contact us to learn more or visit our FAQ page for answers to common questions.
Stay safe, stay smart, and happy house hunting!