Renters And Homeowners: Beware These Fraudulent Real Estate Scams


Real estate is all about safety, home, and security. But those wonderful emotions, if you’re not careful, can lull you into a false sense of trust. And unfortunately, in real estate as in everything else, you need to be on guard for scams.

The good news is that same schemes keep popping up over and over—so here are the big two to watch out for.

The Rental Scam

What It Is: Taking application money (or even rent) on a place the scammer doesn’t own.

How It Works: The con artist gets photos of a vacant property and lists it, just as a realtor would. Unsuspecting potential renters get interested in the apartment, and hand over money for application fees, and sometimes even go so far as to rent. In a variation of this scam, the con artist actually gets keys to the apartment or house and shows it, even though he doesn’t represent the owner and doesn’t have the right to lease it. This scam got so popular that the FBI issued an alert about it earlier this year.

How To Stop It: Don’t deal with anyone who isn’t a licensed real estate agent in your locality. (Most states require agents to carry some sort of pocket ID cards, like a driver’s license.) Realize that if a true real estate agent is suddenly “called out of town,” someone from her firm will be available to show you the property. Never fill out a credit application before you see an apartment. Never wire anyone money for an apartment, and never give anyone cash for an apartment. Also, use common sense as far as apartment prices. If the price of something seems too good to be true, it probably is. Sometimes you can get a little bit of a price break by renting directly from a property owner—they might want, say, a particularly responsible student. But if you do want to rent directly from a property owner, ask to see their photo ID and look them up in your city’s tax records, to make sure they’re a true owner.

The Homeowner’s Scam

What It Is: Being charged $50 or $100 for a copy of your deed—a document you can get in most areas for about five bucks.

How It Works: If you’re a homeowner, you receive direct mail offering you a certified copy of your deed, which the letter calls a “must-have” or an “important” document. The letter offers you this document for a “reasonable” price of maybe $50 or even $99. However, the letter never bothers to tell you that you probably have a copy of your deed in your closing papers. What’s more, it never tells you that your deed is already on file with your county clerk and that if you need a copy, you can usually get one just by going down to the clerk’s office.

How To Stop It: When you buy a home, put all your closing papers—like your copy of the deed and your copy of the mortgage note—in a place where you can find them again. (Extra tip: the piece of paper you’ll actually need to see from this file is your HUD-1 settlement statement, which you’ll use to file your income taxes; everything else you look at so rarely you could just bury it in the backyard). If you need a copy of your deed (which is rare; I’ve owned several properties and have never needed a copy) just go down to your county clerk’s office and ask for one. You can then get a certified copy for just a few dollars. In Chicago, for instance, the first two pages of a deed are $2 each.

Tell us in the comments: Have you ever thought you were being scammed? What tipped you off?

  • Anonymous

    This is so scary. I know someone who had the rental scam done to her. I thought she was stupid at the time. No longer.

  • Anonymous

    This is so scary. I know someone who had the rental scam done to her. I thought she was stupid at the time. No longer.

  • Anonymous

    Readers, has anyone you know been targeted for a scam?n

  • Anonymous

    Are you sure that these things actually happen? They seem kind of nuts to me.

  • Anonymous

    The writer puts it plainly to use common sense. Anyone who falls for these should be paying much more attention.

  • MonocleMom

    I know someone who had the homeowners scam done to them. I cant remember the amount but it was like $100. Kind of reminded me of the Nigerian letters. The person was so embarrassed when it happened to them.

    • Guest

      What happened? Did the thief go to jail?

      • MonocleMom

        No. They never did get caught. Boy was she embarrassed and has been the most vigilent about things ever since. Can’t say I blame her but boy that was something.

  • guest

    I once emailed a person on craigslist about a rental, he replied that he was in Iraq but someone had keys and could show me in. I immediately marked the email as spam and never again replied to postings were they only had an email as contact.

    • J

      This definitely doesn’t sound like a scam if someone was willing to meet you in person.

  • Pro1review

    I’ve been the subject of two scam attacks during this LONG period of time my house has been listed for sale. The first was a “overpayment” scam from a “buyer” in England. We caught on very quickly.nnThe current scam is something new: I’ve been unable to find ANYTHING about it online. It involves a “buyer’s representative” (non real estate agent) who wants to enter into an owner-finance transaction. The price of the house is raised by $120xxx to provide a “finder’s fee” for the person who contacted us, we enter into an owner-finance agreement, he gets a $120xxx finder’s fee, we allegedly get our list price ($400xxx), and his “father” purchases the property via a Mortgage Note Buyer company owned by the “representative.” It’s convoluted and, frankly, I’m not even sure I know how it works, but the rat smells bad and I’m not biting. Rep name, btw, is “Edward J. Mitchell” with “Home Team Solutions, LLC” both of Missouri, and the “father” allegedly lives in Texas.

    • Ed

      Hey Lynda. I don’t appreciate you listing me or my company’s name on this website and calling me a scam artist just because you don’t understand what an owner finance transaction is or what opportunity I tryed to create for you. The only reason I presented everything to you upfront was only to let you know that I had nothing to hide and that I wanted this deal to go as smooth as possible.I provided you with an opportunity to recieve 100% of what you we’re asking from this dea, so why should it matter to you what I want from the deal?! I should be the one posting you on this website because you, for what ever reason, requested that I give you my company’s tax id #! I am very disgusted with your lack of professionalism, especially considering the fact that, you are a lawyer. We haven’t even began the transaction and you’re posting my information on a website saying that Im trying to scam you?! Im outraged, and cant believe that you would do something like that.

    • Ed

      For the record Im not trying to scam you, and if you want to sell this house in 30 days, you’d better resond to the email that I just sent you or I’m done. Wow, I can’t believe that you did this! Unfreaking Believable!

    • Ed

      Also, I don’t own any “Note Buyer Company”. The other company is owned by someone else. All I wanted to do was capitolize off of my father wanting me to find him a home in missouri. Which from my initial opinion of what your asking price for your property is, ironically fit into what we wanted to do “The Perfect Property!” so your lack of understanding of what we wanted to do caused you to post negative comments about me and my company on this website, and little do you know may have just cost you the best thing that could’ve happen to you in regards to you selling this house. I’m done leaving comments because I am so ercked at the fact that you are discrediting me and my company’s name on this website. Please don’t take this the wrong way, but I still want this deal, but you need to figure out how you are going to erase that comment from this website or I’m calling my lawyer. How we got to this point I don’t know, but like I said to you earlier, I want this deal to go in you favor, as well as mine, and I still do, but at least call and talk to me before you go around discrediting me and my reputation as a trust-worthy and caring individual. You should have scenced that from the fact that I wasn’t even trying to negotiate your asking price. I simply told you too much, and it , I quess, scared you since some prick tryed to scam you previously. Just give me a call so that we can start on this deal. No hard feelings towards you and what was said on this website about me and my company. I just want to get the deal done. As a matter of fact, you can leave the comment that you left on this website until we close, only because I want to prove you wrong, and after we close, I want you to post a “Post Transaction Comment” sharing with everyone how you were wrong about me and my company. Im availible at anytime all day Wednesday. Talk to you later Lynda.

    • planejane

      From the three comments that I’ve just read by Ed in response to your post, I assume that he’s this Edward J. Mitchell that you referred to by what he said in his three comments, and it seems like he really wants to help you sell your home as long as he makes something out of the deal. I know what owner financing means and how it works, and it sounds like you maybe misunderstood what his intentions were. I had a similar situation about three years ago. I tryed listing my home for about 2 years and I just could not sell it to the right buyer. After a while someone contacted me and asked me if I wanted to owner finance someone that they knew in order to sell my home. At that point, I was willing to at least consider their proposal. My home at the time appraised for $230,000 and I only wanted $200,000 for it. We made an agreement that I would owner finance his buyer, and the difference between what I wanted for my home and what I sold my note for would be his referral fee. There was no risk involved because I didn’t have to pay him unless I sold my home to his buyer. Once we finally created the note, I recieved an offer of $207,000 for my $230,000 note from a private investor note buyer and I sold to him within 1 month. The extra $7,000 for referring his friend as a buyer, which gave me the opportunity to sell my home at exactly what I wanted, was paid to him through escrow. If I didn’t close that deal, I don’t know if I would have ever sold my house!

  • JBck

    I was looking to rent a house on craigslist. I called the number. They asked for money to be part of the program so I could get the address of the rental. BIG red flag, no one should ask for money BEFORE you see a property. I looked the company up online and found out that they are legitimate company. They list random homes for rent, you pay a fee, they give you the address. From there you contact the homeowner and negociate a rental. The scam is the homeowner has NO IDEA thier home is being listed for rent! The pictures in the ad are completely random and have no basis in reality. I don’t understand how it can be legal… but they have a store front in Los Angeles and everything.