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10 Sneaky Real Estate Scams

10 Sneaky Real Estate Scams + How to Protect Yourself & If a Realtor, Your Client

This article was published by a real estate coach in the US; however, some or all of these may be prevalent here in Ontario, Canada. Primarily written for Realtors, there are some worthy caveats for clients.

Real estate scams cost buyers, sellers, property owners, renters, and real estate professionals upward of a billion dollars yearly. And that’s not even the worst of it. Scammers are becoming increasingly sophisticated and more complicated to catch, and the financial losses caused by real estate scams perpetrated by these criminals are tough to recover.

The good news? Proactive real estate professionals are getting better at spotting real estate scams and protecting their clients.

Read on to learn about effective strategies you can use to protect your clients (and yourself) from being duped by some of the sneakiest real estate scams happening now.

1. Closing Wire Fraud

laptop in a dark room with screen algorithms

Without a doubt, the most devastating and dangerous real estate scam for our clients is closing wire fraud. Here’s how it works:

A scammer starts by hacking the email inbox of a principal party in a real estate transaction. Most commonly, it’s a closing or title company, but they may even assume the identity of you as the real estate agent. These hacks are difficult to detect because the scammers aren’t doing anything other than observing their target’s communications.

Once they’ve identified an imminent closing, the scammer creates a fake email address from what appears to be a reputable source. Then they provide the real estate buyer with wiring instructions for closing funds, directing them into that account.

Unsuspecting buyers then wire their funds to the scammers instead of the closing company, often to the tune of tens or even hundreds of thousands of dollars. Funds wired to nefarious accounts, especially in offshore and often unregulated banks, are incredibly difficult to recover and are often never seen again.

Obviously, theft at this level leaves buyers completely devastated and affects the sellers in a transaction too, as they no longer have a buyer for their property. Closing wire fraud also impacts the real estate industry as a whole since consumers lose confidence in the way the system operates.

How to Protect Your Clients (& Yourself) From Closing Wire Fraud

Unfortunately, the warning signs of this particular fraud are incredibly difficult to spot since most of the groundwork for this scam is laid passively when the thieves are observing and gathering information about their marks.

However, you can take steps to protect yourself. Ensure that you and your client have a clear understanding of where the wiring instructions are coming from in any transfer of funds. Communicate clearly about who will be sending them and when they will arrive. That way, if they arrive at a time you’re not anticipating, you’ll know to be on alert.

If you are going to exchange sensitive information via email (which, honestly, is a reality in the real estate business), make sure you’re following all the security protocols, enabling two-factor authentication, and keeping all your business email in one place—rather than spreading it across your business and personal accounts.

Note: Wire transfers and e-deposits are more secure in Canada and in my 18 plus years in real estate, have not come across this scam, (Ty Lacroix).

If you’re not feeling confident in your email server’s security, the simplest way to protect yourself and your clients is to pick up the phone and call to verify any emails you or your client receives.

2. ‘We Buy Houses’ Scams

we but house Yellow Signage

If you’ve been on the planet for any part of the past few years, you’ve probably seen a few of those bandit signs claiming “We Buy Houses for Cash” along the high traffic areas of your town. Before you pick up the phone and call the number, you should know it’s probably a scam. Here’s how it works:

A desperate seller calls the number on the sign and the person on the other end promises the seller a quick cash sale. The scammer convinces the homeowner to sign over the deed to the home early, promising a rapid mortgage payout. Once the deed is signed over, the scammer now has complete control of the property and can take possession. 

The scammer can now rent the property for pure profit while the victim is still on the hook for the mortgage payment and out on the street. 

How to Protect Your Clients (& Yourself) From the We Buy Houses Scam

This is a particularly deplorable scam that preys on homeowners who may have fallen on hard times. The best way to help prevent this type of scam is to communicate with your potential clients how these scams work. Be the main point of contact for any real estate transactions with your clients and potential clients. As agents, we know how to spot these types of scams and steer our clients far, far away. 

Educate your community on red flags such as cheaply made fliers and a lack of presence online. Remind people to always do their research. If a company can’t be found online or registered with the Better Business Bureau, then it’s probably a scam. And if you or someone you know has been a victim, be sure to report the fraud to the authorities.

3. Vacation Rental Scams

Couple Entering to new house

This scam can ruin any vacation in a second as it victimizes potential renters of vacation rentals. Here’s how it works:

A vacationer scrolls through a popular short-term rental platform like Airbnb or Vrbo to find a rental for an upcoming trip. They find the perfect location and contact the owner in the listing to book the property.

But scammers, who post fake listings on these platforms, pose as owners to redirect renters to outside platforms. Rather than booking directly through the reputable site, the scammer directs his target to go off the platform to make a payment to book the rental property. The scammer usually directs unsuspecting vacationers to a platform like Zelle or Venmo for payment.

When the renters arrive for their stay, they realize that they don’t have a reservation and they’re out the money they spent to book the property.

How to Protect Your Clients (& Yourself) From the Vacation Rental Scam

This particular scam hurts real estate agents who also manage short-term rental properties. When clients get scammed, it hurts the short-term rental industry as a whole. The more people get burned, the less likely they are to continue using the vacation rental platform.

It’s smart practice to skim the listings on the rental sites where you list your property and on other sites, as well. It’s a painstaking process, but if your property has been cloned and is being used to scam people, it could hurt your reputation. If you find your property being used in this way, be sure to report it to the platform support team.

Also, warn people who like to use platforms like Airbnb or Vrbo to never book outside of the platform. If a client is not sure about the authenticity of a listing, they can screen shot the picture in the listing and do a Google Image search to see if the photo is being used elsewhere. 

When a property owner asks potential renters to book outside of the platform, it should set off alarm bells. Either the property owner is a bit of a shyster, trying to avoid paying the 3% fee for using the platform, or it’s a scammer trying to defraud potential tenants.

4. Looking to Buy in Your Neighborhood Scam

woman using mobile with scam alert alarm

This scam is a little newer than some of the other scams in this list. It looks legit when you receive a text or a voicemail that says, “I’m not sure if I have the right number, but I’m looking to buy a house in your neighborhood within the next couple of weeks. I pay cash.” These scams are targeting homeowners who might be enticed by a large, fast cash payout. Here’s how it works:

A homeowner gets a voicemail or a text message from someone, usually with just their first name given, saying they’re looking to buy a house “in your neighborhood” in the near future. The person gives a phone number, or a short link in a text message, to get back in touch if interested.

The homeowner calls back and the person offers an all cash deal to buy the home. The homeowner agrees and a contract is signed. However, by the time the transaction is complete, the homeowners are out tons of money on the sale of their home. 

These buyers are typically wholesalers offering a cash buyout at a steep discount. They target specific areas where they can get homes under contract and then turn around and sell the contract to an investor who will either tear it down and build something new or refurbish the existing house and flip it at a huge profit. 

Wholesaling has skyrocketed in the past decade with more and more people getting in on the action. They make money by charging a “finder’s fee” when they sell the contract to the investors and never actually buy the homes. 

How to Protect Your Clients (& Yourself) From the Wholesaler Scam

This scam is difficult to uncover until someone tells you they’ve been contacted through either a voicemail or a text message. But when that happens, you, as an agent, have a responsibility to educate your seller clients on the pros and cons of using a wholesaler and how their process works. 

For a homeowner looking to get out of their existing home quickly without doing all the work it takes to repair, spruce up, and market a home and they’re willing to take a huge cut out of their profits, it could look like an attractive option. And for some, it may be what they choose to do. But if your clients choose to go that route, you can at least educate them so they can make a fully informed decision.

5. Fraudulent Foreclosure Relief

lonely man sitting on the bridge

Our next scam is a particularly cruel one because it leverages a scary and often painful time in someone’s life: mortgage foreclosure. Foreclosure status on a home is public information, which means bad actors can access lists of homes in financial distress.

Scammers will often take advantage of this by going door-to-door and offering non-existent foreclosure relief services to their targets. Services are priced at a relatively low rate of $400 to $500 or more. Homeowners are promised representation with their bank and more time in their home to sort out a solution to their financial problems. Instead, they get scammed, and are left shocked and angry, and, unfortunately, still facing foreclosure.

These scams are especially effective on those who don’t understand their options in foreclosure. Scammers often target the elderly or those whose first language isn’t English, which somehow makes these scams feel all the more menacing and repugnant.

How to Protect Your Clients (& Yourself) From the Fraudulent Foreclosure Relief Scam

First and foremost, educate your clients and your community. Make sure it’s clear that these sorts of services aren’t illegal, and selling them door-to-door isn’t either. However, your clients should be aware that before they write someone a check or give someone their hard-earned cash, they should verify the person’s identity and real-world capabilities.

As real estate professionals, we’re negatively affected by this scam too. When foreclosure rates are high, more homes begin to sell below market rate, thus reducing our total commission earnings. This scam accelerates foreclosure for its victims because they’re being swindled out of money they could otherwise use to legitimately resolve their issues.

6. Short-term Rental Overpayment

white painted house in the middle of high grass field

This is a version of a widely used phone scam that criminals use to target the elderly in the United States. This scam recently made its way into the real estate industry, affecting owners of short-term rental properties and property managers. Here’s how it works:

A would-be renter contacts a property manager of a short-term rental they find on Airbnb or similar. They start a conversation about a stay with special circumstances—like an extended length stay for a reduced rate—and offer to book privately, outside of the Airbnb booking engine.

At first, this seems advantageous to the property manager, who may be eager to avoid paying Airbnb their cut. Once the scammer senses that enthusiasm, they spring the trap.

The scammer will “accidentally” overpay the landlord for their stay, usually using a stolen credit card. They’ll say something like, “I was supposed to pay $600, but I mistakenly paid $6,000!” They then ask for a refund.

Since they’re not using the Airbnb payment platform, the landlord may feel pressured to refund their overpayment using a more direct method like the Venmo or Cash App. When the property manager relents and repays, the scammer takes the money and runs.

How to Protect Your Clients (& Yourself) From the Short-term Rental Overpayment Scam

This scam hits real estate agents who also work as property managers hard. The best way to protect yourself is to always, always, ALWAYS use established booking and payment platforms. The extra 3% simply isn’t worth the risk of losing much more.

If you’ve got clients who manage their own rental properties, encourage them to carry fraud protection on their business accounts. That way, they’re covered if they fall victim to this scam.

7. Bait & Switch Loan Rates

lots of Bank Storage

The bait-and-switch loan rate scam is a tactic used by unscrupulous mortgage lenders to lock borrowers into loans they otherwise wouldn’t choose. Here’s how it works:

A lender will conditionally offer a homebuyer pre-approval for a loan pending a full review of their credit. However, what they won’t mention is a small item stated in the terms of service: the homebuyer’s deposit required to start the application process will become non-refundable should they choose to back out after a specific date.

The lender then reviews the buyer’s application and will approve them for a loan, but at a higher rate than initially quoted. Many people don’t read the terms of service unless expressly told to do so (and an honest mortgage broker would encourage their clients in this direction).

Once past their cancellation date, the buyer then feels pressure to accept this new rate to avoid losing their deposit.

How to Protect Your Clients (& Yourself) From the Bait & Switch Loan Rate Scam

The best thing you can do for your clients is to maintain a list of reputable, reliable lenders in your area. Doing business with reputable lenders, you and your clients can avoid falling victim to this fine-print scam.

Remind your clients that the mortgage industry is made up of humans, some more honest than others. Your list is a group of people you’ve worked with directly, and you can vouch for their skill, care, and competence and feel comfortable referring your clients to them.

Remember, as a real estate agent, we’ve got skin in this game too. Using high-quality, reliable lenders results in a higher loan approvals rate for your clients, plus more successful closings and increased revenue for you. We’ve got a symbiotic relationship with the mortgage industry. The more we promote high-quality operators, the less oxygen the sketchy ones will get.

8. ‘The Invisible Home’

transparent box with black and white polka dots patterns

This scam is especially prevalent in very competitive markets. Here’s how it works:

A “property owner” will offer a home FSBO or even pose as an agent and advertise a home as “coming to the market soon.” When people start to reach out for more information, the scammers will weave a tale about how this is a “confidential listing” and “for privacy reasons” they can’t give all the details about the property yet.

The crooks will then share a bunch of really attractive listing information, appealing photos, and highlight updates, renovations, and other details designed to entice the potential buyer. The interested buyer may feel they’re getting an exclusive sneak peek, but conveniently, nothing can actually be verified with a third party.

Even with these obvious red flags, buyers in a competitive seller’s market may consider putting an offer on a home without contingencies. That’s when the scammer asks for a “good faith deposit” just to make sure the buyer is serious.

How to Protect Your Clients (& Yourself) From the Invisible Home Scam

This is pretty straightforward. If someone is trying to sell your client a house but can’t provide the address, it’s a scam, plain and simple. Don’t let your clients get excited about a property that doesn’t exist.

This scam really burns real estate agents because it wastes our time, energy—and in the worst-case scenario—our clients’ money. Establish strict protocols on how your offers are written to protect you and your clients. It isn’t our job to serve the whims of our clients—it’s our job to protect their best interests.

9. Lipstick on a Pig

eye to eye contact of a pig and a man with mustard bonnet

If you’ve spent any time as a listing agent, you’ve probably encountered situations with your sellers when they’ve under-emphasized some features on their seller’s disclosure statements. This isn’t uncommon—sellers see their home in the best light possible, and a gentle correction on our part usually brings things back in line.

However, scammers do more than over-generalize—they flat-out lie. Here’s how the Lipstick on a Pig scam works:

Knowing that a home has major defects like mold, foundation issues, or water or fire damage, a property owner will knowingly make alterations to the property to hide these defects, then lie about them on the seller’s disclosure statement (SDS). Many of these scammers will actually get a home inspector in on the act, contracting for a fraudulent home inspection report that they can then offer to buyers as proof of a property’s clean bill of health. This may also discourage a buyer from getting their own inspection done.

After a sale has closed and the defect is discovered, there is virtually no recourse for the buyer unless they can prove that the seller committed real estate fraud—something that’s difficult to do since this often becomes a “he said-she said” scenario.

How to Protect Your Clients (& Yourself) From the Lipstick on a Pig Scam

Educate your clients about the homebuying process, especially their right to an inspection period on any potential property. To be clear, it isn’t illegal or unethical to offer buyers a home inspection report. But to discourage or flat-out deny a buyer the ability to do their own inspection is a clear sign that something fishy is going on.

As a real estate agent, you have to protect yourself as well. We’re obligated to disclose any knowledge of material defects of a property or firsthand knowledge of attempts to cover up said defects. You open yourself and your broker up to litigation since non-disclosure isn’t protected by errors and omissions insurance. Your failure to disclose can become an incredibly costly mistake to make.

10. Craigslist (Kijiji in Canada) Rental Scams

miniature city model

Anyone who’s spent time on Craigslist or prospected for leads there knows that there are tons of opportunities, but also some shady characters lurking on the platform, including some real estate scammers. Here’s how they conduct the most common of all Craigslist real estate scams.

First, they head to a reputable real estate website like Zillow or (CREA in Canada)and capture listing information for properties currently on the market. They’ll grab listing photos, descriptions, and enough detailed information to make their scam appear legitimate.

Next, they’ll go to Craigslist, a social media site, or any other platform where renters may be looking like Kijiji in Canada, and create a fake ad for a rental property using the details they’ve scraped off of the original property listing. They’ll often list the price below market value to make the offer seem like a fantastic deal and generate communication with would-be renters.

Once a potential tenant contacts them about the property, they’ll use some line like, “We’ve got a ton of interest in our property, but nobody committed yet. If you’d like to put down a deposit to hold the property, we can do that, then set up a time for you to see the home.”

Of course, when the potential renters arrive to see the home, they discover the home is not for rent and occupied by the true homeowners. And once that deposit amount clears the scammer’s account, the victim will never hear from the scammer again.

How to Protect Your Clients (& Yourself) From Fake Craigslist Rentals

As a real estate agent, the first thing you can do is start checking Craigslist and Facebook periodically for your listings being used as fake listings. This can seem a little laborious at first, but 15 minutes once a week is worth the time to ensure your business isn’t mixed up in these sorts of real estate scams. You might try using Google Images to search for other uses of your listing photos.

When working with rental clients, make sure you’re the first point of contact with any potential landlords. As a real estate agent, you know reputable landlords would never require a deposit for a showing or disconnecting from a lease. To our clients, these opportunities sound almost too good to be true. As their agents, we know these real estate scams really are too good to be true.

Bottom Line

Real estate scams are real, and they affect our industry in real and costly ways. Educating yourself and your clients about the most prevalent real estate scams and learning how to protect both yourself and your clients is a crucial line of defense that will help make real estate scams like these a thing of the past.

Note: The above was written and produced by Chris Linsell. Some of the above may be prevalent here in Ontario or not, however, something to keep in mind.

Chris Linsell

Senior Real Estate WriterReal Estate CoachREAL ESTATE COACH


  • Licensed real estate professional and CE provider in 3 states.
  • Successfully coached more than 50 Realtors.
  • An avid outdoorsmen and 30+ year member of Trout Unlimited.


Chris is a resident expert on real estate topics ranging from marketing, lead generation, transactional best practices, and everything in between. As a licensed agent in Michigan, Chris has been a part of hundreds of transactions from modest rural starter homes to massive waterside compounds. A sought-after speaker and educator, Chris has been a featured presenter at major real estates events such as the NAR Annual Conference, Tripleplay, RealtorQUEST, and more. When he isn’t writing, you’ll find Chris fly fishing the trout streams of Michigan or on the stage in his community theatre’s latest production.