Beware of Real Estate Scams
The real estate industry can unfortunately attract bad actors. This guide is designed to help protect homeowners from fraud while selling their home, ensuring you have the knowledge to move forward with confidence and security.
How to Avoid Wire Fraud
- Always verify wiring instructions by calling your title agent at a known, trusted phone number.
- Never follow wiring instructions sent via email without secondary verbal confirmation.
- Be wary of last-minute changes to payment locations or banking details.
- Verify the domain name of any sender asking for financial information or fund transfers.
Spotting Fraudulent Buyers
Red flags to look for when dealing with potential buyers to identify fraudulent activity and protect your investment.
Quit Claim Deeds & Real Buyers
Scammers may push you to sign a quit claim deed to quickly transfer ownership without proper protections. Legitimate buyers purchase property through a reputable title company, where the deed is prepared and recorded correctly and title insurance is issued. This process protects you by confirming clear ownership, revealing liens or claims, and ensuring funds are handled safely through escrow. If someone wants you to skip title insurance or avoid using a trusted title company, treat it as a major red flag.
Refusal of Traditional Escrow
Fraudulent buyers often pressure sellers to bypass a traditional title and escrow company by claiming it’s “too slow” or “too expensive.” In reality, skipping escrow removes the neutral third party that protects both sides. A reputable buyer will: (1) open escrow with a licensed title company, (2) allow you to choose or approve the company, and (3) agree that all funds move through escrow, not personal apps or cash. If a buyer insists on handling everything privately or “off the books,” walk away.
Excessive Pressure & Speed
While quick closings are possible with real investors, scammers create extreme urgency so you don’t have time to ask questions or get advice. They may say the offer expires in hours, refuse to let you show the contract to an attorney, or discourage you from calling a title company. A legitimate buyer will give you reasonable time to review documents, answer your questions in writing, and welcome you involving trusted professionals. If you feel rushed, confused, or unable to verify details, pause the process and seek help before signing anything.
Why Title and Escrow Matter
Using a reputable third-party title and escrow company is non-negotiable for a safe transaction. These professionals act as neutral intermediaries to ensure that the property title is clear and that funds are only released when all contractual obligations are met.
- Verifying valid ownership and clearing outstanding liens or encumbrances.
- Securely holding earnest money and final funds in a regulated account.
- Ensuring all legal documents are recorded correctly with the county.
Contract Red Flags
When reviewing a contract for the sale of your home, please stay alert if you see any of the following requests. A safe and professional buyer will never pressure you into these risky arrangements.
- Avoid any buyer who asks you to perform or pay for your own repairs as a condition of their cash offer.
- Be very cautious if a buyer mentions using a quit claim deed to transfer your property privately.
- Never agree to a sale that does not involve a professional, third-party title and escrow company.
- Protect yourself by never signing over your deed until you have been fully paid and the funds are confirmed.
- Do not allow a buyer to start renovations or move into the home before they legally own it.
- Ensure your contract includes a clear due diligence period that allows you and the buyer to verify everything before closing.
Have a Concern? Talk to Us
If you suspect you are being targeted by a scam or feel unsure about a buyer, reach out before you sign anything. We can connect you with reputable, licensed, and insured title and escrow companies we’ve successfully worked with before, and help you verify that we—and any other buyer you’re speaking with—are real and operating the right way.