Protecting Buyers and Sellers in an Evolving Landscape
The real estate industry is no stranger to fraud, but in today’s digital world, scams targeting buyers and sellers have become more sophisticated. From wire fraud schemes to deed fraud, unsuspecting homeowners and investors risk losing thousands—or even their entire property—if they don’t stay vigilant. Understanding the evolving landscape of real estate fraud and how to prevent it is critical for anyone buying or selling a home.
The Rising Threat of Fraud in Real Estate Transactions
Real estate fraud has recently surged, costing buyers, sellers, and agents millions of dollars. In 2024, losses from wire fraud alone reached a staggering $446 million, with fraudulent transactions increasing by over 40% since the previous year. Using advanced phishing tactics and AI-generated impersonations, cybercriminals have found new ways to infiltrate the real estate process.
Florida, a prime real estate hotspot, has been especially affected. Reports indicate that real estate fraud in the Sunshine State accounts for nearly 25% of total losses in the U.S. due to its high volume of transactions and large population of out-of-state buyers.
Typical Real Estate Fraud Schemes to Watch For
1. Wire Fraud and Business Email Compromise (BEC)
Buyers, beware—criminals often impersonate title companies, real estate agents, or attorneys, sending fraudulent emails with fake wiring instructions. Once funds are transferred to the scammer’s account, they are quickly withdrawn and nearly impossible to recover.
How to Protect Yourself: Always confirm wiring instructions by phone with a trusted representative at your title company before transferring funds.
2. Seller Impersonation & Deed Fraud
Scammers have increasingly targeted vacant or unoccupied properties, forging documents to “sell” them without the owner’s knowledge. In some cases, fraudsters successfully transfer deeds into their name and take out loans using the property as collateral.
How to Protect Yourself: Monitor your property records regularly and sign up for alerts from your county’s property appraiser’s office.
3. Foreclosure Rescue & Equity Skimming
Homeowners facing financial hardship are often targeted by fraudsters who offer to “save” their home in exchange for signing over the deed. These bad actors then either strip the property of its equity or rent it out while refusing to pay the mortgage, ultimately leading to foreclosure.
How to Protect Yourself: Always consult a licensed real estate attorney or financial advisor before transferring ownership rights.
4. Rental Scams
Scammers frequently list homes they don’t own on rental websites, collecting deposits and the first month’s rent from unsuspecting tenants before disappearing. These schemes have surged in high-demand housing markets.
How to Protect Yourself: Verify ownership records and never wire money without seeing the property and confirming the landlord’s identity.
How Buyers & Sellers Can Stay Safe
Work with Trusted Professionals: Engage a reputable title company, like Setco Services, that prioritizes security and transparency throughout the transaction.
Verify Everything: Double-check all communications, especially financial transactions. Look for inconsistencies in email addresses, phone numbers, and website URLs.
Be Wary of Last-Minute Changes: Fraudsters often create urgency to pressure victims into acting quickly. Always confirm by direct phone before making any changes to payment instructions.
Monitor Your Property Records: Homeowners can sign up for alerts with their local property appraiser to detect unauthorized changes to their deeds or mortgages.
Stay One Step Ahead of Real Estate Fraud
Fraud in real estate transactions is more prevalent than ever, but awareness and proactive measures can significantly reduce the risk. Buyers and sellers who stay informed, verify all details, and work with trusted professionals can navigate the closing process with confidence and security. At Setco Services, we go the extra mile to protect our clients from fraud, ensuring every transaction is handled with the utmost integrity and care.
Give Us a Call to Help You With Your Next Closing
850.650.6161 | [email protected]
