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Real Estate Scams

Real Estate Scams – How to Avoid Being Taken in by Fake Listings

When looking to buy a home or rent an apartment, most people turn to real estate sites or apps to help them find the perfect property. But sometimes the listings on these sites are misleading or downright fraudulent. Learn how to protect yourself and your money from fake listings.

Spotting a Real Estate Listing Scam

Fake listings are one of the most common forms of the real estate scam. Most real estate sites allow prospective buyers to view the property with no strings attached. The site will connect buyers to a licensed realtor who has access to the property and is allowed to show it. Any listing that indicates a deposit is required to view the property is probably a scam.

However, fake listings advertise properties that don't exist, are not for sale or rent, or are not what they seem to be. They might demand advance payments or deposits, utilize images and descriptions from other websites, or push you to take immediate action. You should not give in to the pressure to act or send a payment for a property you have not seen.

Real estate marketplace Zillow advises buyers to watch out for the following red flags of a real estate scam:

  • Requests to wire funds – The majority of frauds ask for money to be wired using Western Union or MoneyGram or to be sent using payment apps like Venmo or Cash App. Never send money to someone you haven't met in person. Similarly, never accept money that was wired to you without your permission.
  • Long-distance solicitations – Many scams are perpetrated by people located overseas who claim to be interested in buying or renting a house in the States. Bad actors will fabricate valid excuses for why they must conduct business remotely. These individuals may pretend to be missionaries, United Nations employees, or members of the armed forces. They should be avoided.
  • Requests for verification codes – Avoid sharing any verification codes received via text, as scammers can use these to hijack your account, enabling further scams.
  • Requests for personal or financial information – Do not provide your bank account number or Social Security Number before verifying it is a trusted source and then only provide this information sparingly.
  • Grammar/spelling errors and sob stories – Spelling and grammar mistakes are typically indicators of fraud. Messages about financial hardships, family problems, or agents charging exorbitant fees can also point to fraud.

Rental Listing Scams

People looking for apartments or rental homes are likely considering amenities, location, and cost. Since scammers are aware of this, they create fake rental listings to get your attention and your money before you realize the property doesn’t exist or isn’t available. Learn how to recognize and avoid misleading advertisements and safeguard your finances before you act.

Much like the real estate scams targeting homebuyers, rental scammers will copy pictures and descriptions from real listings, replacing the legitimate owner’s name and contact information with their own, and posting the fake listing on a new site. The ad may indicate amazingly low rent and attractive amenities, or it may present low-quality rentals at a high price point. When you ask to see the property, the agent or owner claims to be out of the country or otherwise unavailable. Nevertheless, they attempt to pressure you to make a decision.

The Federal Trade Commission (FTC) recommends using the following strategies to avoid being a victim of a rental scam:

  • Conduct an online search – Look for the name of the owner or rental company using the words “complaint,” “review,” or “scam” to see what others have said about their experience.
  • Examine the price of similar units Is the price lower than most comparable units in the area? This could be a sign of a scam.
  • Look carefully at the property before you sign or payThis can be done virtually or in person. Ask the agent for a business card issued by the owner or manager to check the agent’s ID. Make sure it matches the company’s records.
  • Never provide personal or financial information If someone contacts you and claims to be working with the owner or rental company, don’t provide personal information. Use the contact information you have and contact the owner or property management company first.
  • Don’t pay with cash – If anyone requires you to pay with cash (or wire transfers, money cards, or cryptocurrency), it’s a scam. These payment methods are the same as cash. Once you send the funds, it is unlikely you can get them back.

If you notice a rental listing scam, report it to:

  • your local law enforcement agency;
  • the FTC; and
  • the website where the ad was posted.

To report a scam, file a complaint, or get additional information, contact the Consumer Protection Team:

Consumer Protection Team
P.O. Box 30213
Lansing, MI 48909
Fax: 517-241-3771
Toll-free: 877-765-8388
Online complaint form