Real estate transactions can involve significant amounts of money. The average cost of a Massachusetts home is currently over a half-million dollars.
This kind of money unfortunately can attract scammers and others who engage in fraud. According to the FBI, almost 10,000 people were victims of real estate fraud throughout the U.S. in 2024 – with losses totaling over $170 million. Many more people were likely victimized but too embarrassed to report it, blamed themselves or thought there was no point in trying to seek justice.
How scammers fool people
Real estate scams are easier to perpetrate than ever. That’s partly because more people are buying property without visiting it in person. “Deepfakes,” which are defined as “realistic, AI-generated fake videos, images or audio recordings that mimic a real person’s likeness” can be used to portray real estate professionals, buyers, sellers and even attorneys – not to mention properties.
Even when someone is purchasing a local property or one they’ve toured themselves, the increased use of online reviews, electronic signatures of critical documents and electronic transmission of large sums of money can make legitimate parties subject to hacking. Scammers can pose as a real estate agent, someone with the title company or the lender to divert money that could represent a good portion of someone’s savings.
That’s why it’s critical to confirm that you’re dealing with the right person when making any transaction online – and certainly before moving money. Legitimate real estate and other professionals shouldn’t mind if you call them and verify that a document or instructions came from them.
Of course, there are always fraudsters who will claim they’re selling a home that doesn’t exist or isn’t available for sale, or offer to buy a property with money they don’t have. They may encourage their victims not to bother with a real estate agent, inspectors or anyone else – claiming they can get a better deal by “cutting out the middleman.” Just remember the adage, “If it’s good to be true, it probably is.”
While no one enjoys the red tape and regulations associated with real estate transactions, they serve an important purpose. In addition to the precautions discussed here, having a trusted real estate and legal professional guiding you through the home purchase or sale process can help ensure that you don’t become the victim of a financially devastating scam.