Common real estate scams and how to protect yourself

The real estate market can be tough, especially when buying, renting, or refinancing a home. Scammers are becoming more creative in targeting housing consumers, resulting in nearly $400 million in losses due to real estate fraud in 2022, according to the FBI's Internet Crime Complaint Center.

Here are five common real estate and mortgage scams to watch out for, along with tips to avoid falling victim:

1. Escrow wire fraud: Scammers impersonate title or mortgage escrow companies through emails, calls, or texts, providing fake wiring instructions. Always verify wiring instructions by calling the numbers listed in the original documents from your lender.

2. Loan flipping and predatory lenders: Predatory lenders persuade homeowners, especially vulnerable seniors, to repeatedly refinance their mortgage, leading to higher loan payments. Work with known banks or lenders, question all fees, and involve a trusted advisor in financial discussions.

3. Foreclosure relief scams: Scammers target homeowners facing foreclosure by offering foreclosure relief for upfront fees. Avoid such offers and work directly with your loan servicer or a HUD-accredited housing counselor.

4. Fake listings and rental scams: Be cautious of rental ads on platforms like Craigslist, as scammers may ask for upfront payments for fake properties. Do thorough research, deal directly with property owners, and use checks instead of cash for payments.

5. Bait-and-switch movers: Moving scams involve companies providing low estimates and then demanding significantly higher payments after the move. Research moving companies' licenses, check for complaints with relevant agencies, and avoid large upfront payments.

If you suspect a scam, report it to the FTC, file a complaint with the BBB's Scam Tracker, and contact your state's consumer protection agency. If you've already fallen victim, consider taking additional steps through IdentityTheft.gov if you've shared private information. Stay vigilant and protect yourself from real estate scams.

Source: Bankrate