Real Estate Scams 2025: How to Spot and Avoid Fraud

WDC NEWS 6 STAFF March 18, 2025

23 4 minutes read

Real Estate Scams 2025: How to Spot and Avoid Fraud

Scams are becoming increasingly difficult to avoid, with identity theft remaining the most common form of fraud. However, real estate fraud is on the rise, posing a significant threat to homebuyers and sellers.

According to the CertifID 2025 State of Wire Fraud study, the real estate industry loses $500 million annually to business email compromise (BEC) scams. In these schemes, fraudsters infiltrate legitimate businesses to divert funds, taking advantage of the industry’s frequent high-value transactions.

Whether you’re buying a home or preparing to sell, staying informed about real estate scams is essential. Recognizing the warning signs can help protect your money and personal information. In this article, we’ll help you identify three common types of real estate scams, spot red flags and take proactive steps to safeguard your transaction.

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1. Wire fraud

Always verify the source by phone or in person before sending money.

(Image credit: Getty Images)

The CertifID 2025 State of Wire Fraud study revealed that 52% of homebuyers and sellers were unaware of wire fraud. This lack of awareness makes real estate transactions a prime target for scammers, who exploit trust and urgency to redirect funds into fraudulent accounts.

Wire fraud is when someone or a group of people impersonate someone you know or another trusted party to convince you to send money to the wrong place. During real estate transactions, scammers could try to pose as your title company, attempting to intercept payments well before closing has begun. If you end up paying a scammer early, you may not know it was fraudulent until you meet for closing.

The study also found that 25% of homebuyers and sellers were targeted by a scammer during the closing process, and 1 in 20 fell victim to wire fraud. These scams often go undetected until closing day, when buyers realize their funds have been misdirected. Of those defrauded, 27% were unable to recover their lost money, making wire fraud one of the most devastating forms of real estate fraud.

To protect yourself, always verify the source before sending money. Check email addresses and phone numbers carefully and never rely solely on email instructions for wire transfers.

Call your agent, lender or title company directly using a trusted number — not one provided in an email or unexpected message. Only send funds to accounts you can independently confirm with your escrow or title company.

2. Fake listings and seller impersonation

Saleswoman greeting female customers while standing outside house

If you can, verify a property’s status in person.

(Image credit: Getty Images)

Property listings are so widely available and easily searchable online. This is good news for homebuyers and sellers looking to find (or sell) a home. But the more information that’s publicly available means there’s a chance for impersonations and fake listings.

Thanks to MLS listings and public records, scammers can access property details, even if a property is not for sale. They can then pose as the homeowner and create a fictitious story to initiate a home sale.

This type of scam can put buyers at risk, especially in a competitive housing market where quick decisions are necessary. For homeowners, it poses a serious threat to both their identity and security — some may even find strangers arriving to tour a home that was never for sale.

To avoid falling victim to fake listings, 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. If possible, compare the online listing to what you see in person — scammers often use misleading or outdated photos.

Since fraudsters typically avoid in-person interactions, a quick visit to the neighborhood can help you spot inconsistencies and confirm whether a listing is legitimate.

3. Fake agents and lenders

Couple consulting with female advisor

Ask your real estate agent and lender about common scams to look out for.

(Image credit: Getty Images)

Artificial intelligence (AI) makes creating a fictitious agent or pretending to be yours easier than ever. Buying and selling a home isn’t typical for most folks, so it’s hard to know if you’re being taken advantage of until after you’ve been scammed.

Agents themselves are being targeted. In some cases, closing agents receive fraudulent payoff instructions that appear to come from a mortgage lender or bank. When verification takes too long, some agents skip the extra step and send the funds to expedite the process — unintentionally diverting funds to scammers instead of legitimate financial institutions.

Real estate agents are the most commonly impersonated professionals in fraud schemes. And less than half of homebuyers and sellers receive fraud education from their agents during initial meetings. Many are unaware of the various fraud tactics they may encounter, including scammers posing as their agent to steal sensitive information or funds.

Your agent should act as a safeguard, but not all real estate agents have the knowledge or resources to effectively combat fraud.

Fraud prevention is a shared responsibility. Agents, title companies and law firms all play critical roles in reducing real estate fraud.

How to protect yourself from real estate scams

Real estate scams are becoming more sophisticated, targeting both homebuyers and sellers at every stage of the transaction. From wire fraud and fake listings to impersonated agents, scammers are finding new ways to exploit the industry’s financial transactions.

Staying informed is your best defense. Always verify the identity of anyone requesting money, double-check property listings and work with trusted professionals who prioritize security. If something feels off, take the time to investigate before making any payments or signing any agreements.

As fraud tactics evolve, awareness and vigilance are key to protecting your investment and personal information. Whether you’re buying or selling, make fraud prevention a priority to ensure a safe and successful real estate transaction.

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