Biggest Scams In Real Estate You Should Know About Before Investing


For most people, buying a home is the most expensive transaction they’ll make in their entire life. And because it is such a huge investment, it’s an even bigger market for scammers to take advantage of the opportunity to prey on novice investors, but even the most seasoned investors are susceptible to being scammed in real estate. The trend of scamming is worldwide. Not only are there the typical “get rich quick” scams but there are also atm scams, weight loss scams, and other trickeries to scam people out of their hard-earned money. And just as easy as it is to get scammed in those areas, the real estate industry is a completely new world of scamming.

So how is it that so many real estate investor hopefuls are getting scammed so easily? Well, it’s mainly because most investments are done online, which is also where the scam artists lurk the most. Some people pose as brokers or real estate agents; there are also fake listings and stolen photos as well.

If you’re serious about getting into real estate investing, you most certainly want to do everything you can to get as well-versed in the industry as possible. By doing that, you will be better equipped to spot real estate scams when you see them.

Protect yourself from real estate scams by seeking guidance from a company that evaluates provided by eXp Realty. Learn about common scams and how to invest safely in the real estate market.

To protect yourself and your money, take a look at some of the biggest and most common scams in real estate to make yourself familiar with.


Real Estate Scams To Look Out For


Real Estate Loans

When investing in real estate, it’s a known fact that unless you have hundreds of thousands of dollars on-hand, you’re going to need to finance your property. Unfortunately, scam artists know this fact as well, and it’s the breeding ground for malicious acts.

Real estate loan scams can come in many different forms. Typically these types of loans are unsolicited or are deceptive in convincing a borrower to take out a loan that they don’t need. But not all hope is lost. There are certain characteristics to look out for with fraudulent loans. Here are a few examples:

  • If a lender offers you a loan with guaranteed approval to anyone, then you know it’s a scam.
  • If a lender pushes you to sign loan paperwork
  • If you have to pay any type of fee before being granted the loan

The above are some of the most common ways to get scammed with a loan. When looking for financing for a short-term rental or to grow your portfolio, only work with a reputable lender, avoid unsolicited offers, and look companies up on the Better Business Bureau website.


Home Inspections

If you’re interested in a particular property, always check out the property and request a copy of the home inspection report. Then, once you have the copy of the home inspection report, hire a trusted home inspector you find yourself just to be sure the home inspection the seller-provided was honest.

According to, a home inspection covers the following areas:

  • Electrical system
  • Heating and cooling systems
  • Roof
  • Foundation
  • Plumbing
  • Windows and doors

With home inspections, never take someone else’s word without doing your own research. All too often people invest in properties that seemingly have a good inspection report to only find out that the property has way more issues than was reported from the home inspection. The thing with this particular scam is that so many people can get involved. Anyone from the real estate agent to phony contractors, they can all “get in” on the act. That’s why you have to invest wisely but conduct your own research first.


Foreclosure Scams

Situations will happen where homeowners are no longer able to pay their mortgage and end up facing foreclosure. The homeowners will then list their property for sale. Investors will see that the property is for sale and buy it from the seller, only to find that shortly after, the banks come calling to claim their property, leaving the investor out of hundreds of thousands of dollars.

To avoid this, pay attention to the sellers and their behaviors. They should be putting you through a process to buy their property. If the process is too easy or they’re not asking you any questions about your finances, they may be trying to pull a fast one on you.

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Anushka Jain
the authorAnushka Jain
'Either write something worth reading or do something worth writing.'