Real estate can be a meaningful part of your life, whether it’s a primary residence, a second property, or an investment. While technology has made real estate transactions faster and more efficient, it has also presented new opportunities for scammers. Understanding the most common types of real estate fraud and how to help reduce your risk can be an important part of protecting your financial plan.
What Is Real Estate Fraud?
Real estate fraud refers to a range of deceptive practices designed to mislead buyers, sellers, or property owners for financial gain. It can affect both individuals and institutions during high-value transactions or periods of change, such as refinancing or closing.
Common Types of Real Estate Fraud
Title or Deed Fraud
Title fraud happens when a criminal uses stolen personal information to forge documents and transfer a property’s title into their name. Once the property is in their name, the fraudster may attempt to sell it, secure loans against it, or even rent it out.
Wire Transfer Scams During Closing
Scammers may impersonate your real estate agent or title company to trick you into wiring funds to a fraudulent account. These schemes often appear as last-minute changes in email instructions and can be difficult to reverse once the transaction is processed.
Mortgage and Application Fraud
Fraud can occur during the mortgage process when false documents or fake employment information is submitted to obtain loan approval. Investors may also be misled when bad actors overstate property values.
Rental or Listing Fraud
In these schemes, scammers repost legitimate rental listings and target potential renters. They collect deposits or request personal information, only to disappear once the fraud is complete.
Best Practices to Help Protect Yourself
1. Always Verify Transfers
Before transferring any funds, especially for real estate closings, call your agent using a verified number.
2. Use Secure Communication Tools
Avoid sending sensitive documents via unencrypted email. Ask about secure document portals.
3. Monitor Your Property Records
Periodically check your local assessor’s website to ensure no unexpected activity has been recorded on your property.
4. Work With Trusted Professionals
Rely on licensed real estate agents, attorneys, and financial professionals who use proper security protocols and have a verified business history throughout your transactions.
5. Protect Personal Information
Be cautious with emails or calls requesting Social Security numbers, account details, or other sensitive information. Wondering if the message looks suspicious? Learn more here.
How Real Estate Fits into Your Goals
Property ownership can be a part of your long-term financial strategy. Whether you’re preparing for retirement, managing income-producing property, or transferring assets to the next generation, real estate decisions should be made with a full view of your financial picture.
StackStone Wealth helps our clients understand the role real estate plays in wealth accumulation, tax planning, estate strategies, and risk mitigation. Learn more about real estate investment strategies here.
If you’d like to learn more about incorporating your property holdings into a broader financial plan or how to take proactive steps to help safeguard your assets, we are happy to connect at any of our offices in Dubuque, IA; Lake Geneva, WI; Rockford, IL; Marquette, MI; Norwood, MA; Kingston, MA; Edgarton, MA; or Hyannis, MA.
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