Real Estate Fraud: What Every Agent and Client Should Know

This is one of the most common scams affecting agents directly. A scammer copies your legitimate listing — photos, description, and property details — and reposts it on another platform (often Facebook Marketplace or Craigslist) with their own contact information, usually at a below-market rent to attract quick responses.

Prospective tenants believe they are renting a real property. The scammer collects application fees, security deposits, or first month's rent — then disappears. The victims show up at the property expecting to move in, only to discover the real owner or agent has no knowledge of the "rental."

According to the FTC, Facebook accounts for approximately 50% of reported rental scams, with Craigslist at about 16% (as of mid-2025).

How Agents Can Protect Their Listings

• Regularly search for your own listings. Do a reverse image search (Google Images) of your listing photos periodically. If they appear on platforms you didn't post to, someone may be using them fraudulently.
• Watermark your photos. Add a subtle watermark with your brokerage name or the listing address. This makes photos harder to repurpose convincingly.
• Set up Google Alerts. Create an alert for the property address. If a scammer reposts it elsewhere, you may catch it early.
• Warn vacant property owners. Homes that are for sale and sitting empty are prime targets. Encourage owners to check the property regularly and consider adding visible signage that warns against unauthorized entry.

This is the scam that can cost a homebuyer their entire down payment — sometimes hundreds of thousands of dollars — in a single transaction.

The scheme works like this: hackers monitor email conversations between the buyer, agent, and title company. They learn the closing date and transaction details. Then, shortly before closing, they send an email that appears to come from the title company or attorney, with "updated wire instructions." The buyer wires their down payment to the scammer's account instead of the legitimate escrow account.

The FBI classifies this under Business Email Compromise (BEC). Between October 2013 and December 2023, BEC globally resulted in approximately $55.5 billion in exposed losses, with $20.1 billion affecting U.S. victims, according to the FBI's IC3.

Prevention Steps

• Verify wire instructions by phone. Call the title company or attorney using a known, trusted number — not one from the email containing the instructions.
• Enable multi-factor authentication (MFA) on all email accounts used for real estate transactions. Compromised email is the entry point for most wire fraud schemes.
• Be suspicious of "last-minute changes" to wire instructions. Legitimate title companies rarely change their wiring details. Any change right before closing is a red flag.
• Warn your clients early and often. Include a wire fraud warning in your buyer's packet and discuss it at the first meeting. The FTC and most state real estate commissions provide printable consumer guides you can share.

This scam targets landlords and property managers. A prospective tenant provides documents that appear legitimate — pay stubs, bank records, employer letters — but are fabricated. They pass the initial screening, move in, and then stop paying rent. In some cases, the goal is to occupy the property long enough to exploit eviction protections.

Another variation involves the "overpayment" scheme: the applicant sends a check for more than the security deposit, then asks the landlord to refund the difference. The original check bounces, and the landlord is out the "refunded" amount.

Due Diligence Steps

• Verify employment independently. Call the employer directly using a number you find yourself (not one provided by the applicant). Confirm the person works there and their stated income.
• Use a reputable tenant screening service. Services that pull credit reports and check eviction history from court records are more reliable than applicant-provided documents.
• Be wary of urgency. A sense of urgency — "I need to move in this weekend" — is a common tactic. Legitimate tenants understand that proper screening takes time.
• Never accept overpayment. If someone sends more than the agreed amount, do not refund the difference. Wait for the original payment to fully clear (which can take 10+ business days for checks).

AI tools that generate realistic text, images, and even voices are making fraud more sophisticated. Scammers can now create convincing fake listing descriptions, generate realistic-looking documents, and even impersonate agents or clients using AI-generated voice calls.

This doesn't mean every AI interaction is a scam — but it does mean that the traditional "it looks legitimate" test is less reliable than it used to be. The spelling errors and awkward grammar that used to flag phishing emails can now be polished away in seconds.

What This Means for Agents

• Verify identity through multiple channels. If a client or vendor sends an unusual request by email, confirm it by phone or in person. Don't rely on a single communication channel.
• Trust primary sources, not forwarded documents. Verify information through county records, official websites, and databases — not through documents provided by the other party.
• Meet people in person. Despite the convenience of remote transactions, in-person verification of identity — especially for high-value transactions — is still the best protection.