The convenience of online real estate listings has transformed the way we buy and sell properties. However, this accessibility also brings increased risk, as cybercriminals exploit these platforms to create fake listings and defraud potential buyers and renters, leading to financial loss and identity theft.
A 2021 report by the FBI’s Internet Crime Complaint Center (IC3) noted that over $213 million was lost to real estate fraud in the U.S. alone, highlighting the growing concern.
Understanding how to identify these scams and protect your personal information is crucial for anyone navigating the online real estate market.
Understanding the threat:
Online scams involving fake real estate listings have become increasingly prevalent in recent years. Cybercriminals use various tactics to create convincing listings that lure in potential buyers.
These scams can range from rental properties that don’t exist to fraudulent sales listings for homes at too-good-to-be-true prices. The goal is to trick buyers into providing personal or financial information or even sending money for a property that doesn’t exist.
Red flags to watch for:
Unbelievable deals: A study by the National Association of Realtors (NAR) found that properties listed at prices significantly below the market average are 75% more likely to be fraudulent.
Be wary of listings offering properties at significantly discounted prices compared to market value. If it seems too good to be true, it probably is.
Lack of photos or details: Research indicates that up to 50% of fraudulent real estate listings use photos stolen from other legitimate ads, as revealed by a reverse image search study conducted by a major real estate platform.
Legitimate listings typically include multiple photos and detailed descriptions of the property. Beware of listings with limited information or generic descriptions.
Urgency or pressure: According to consumer reports, 30% of real estate scams involve pressure tactics to rush potential buyers or renters into making quick decisions without proper due diligence.
Scammers often create a sense of urgency by claiming that the property is in high demand or that you must act quickly to secure it. Take your time and avoid making rushed decisions.
Unusual payment requests: Be cautious of sellers who request payment via unconventional methods such as wire transfers or cryptocurrency. Stick to reputable payment platforms and avoid sending money to unknown parties.
Communication outside the platform: Avoid sellers who try to communicate with you outside of the online platform’s messaging system. This is a common tactic used by scammers to evade detection and carry out fraudulent transactions.
Verifying legitimate listings:
Research the seller: Look up the seller’s name or contact information online to see if they have a legitimate presence or any reviews from previous buyers.
Cross-check information: Analysis by cybersecurity firms reveals that up to 25% of online listings with vague descriptions can be linked to fraudulent activities.
Verify key details about the property, such as the address, using reputable sources like official property records or public databases.
Request a virtual tour or viewing: The Consumer Protection Agency warns that listings without a verifiable address or viewing options account for around 33% of real estate scams.
If possible, request a virtual tour or schedule an in-person viewing of the property before making any commitments. This can help confirm its legitimacy.
Trust your instincts: If something feels off or suspicious about a listing, trust your instincts and proceed with caution. Reach out to a licensed real estate agent in the area who can verify the legitimacy of the listing. It’s better to err on the side of caution than to fall victim to a scam.
Safe online communication practices:
Use secure channels: Communicate with sellers through the online platform’s messaging system or other secure channels. Avoid sharing personal or financial information via email or text message.
Protect your personal information: Avoid providing sensitive information such as your Social Security number or financial account details unless necessary and only to trusted parties.
Be wary of unsolicited offers: Don’t respond to emails or messages promising dream homes outside of your established search criteria.
Be cautious of links and attachments: The FTC found that identity theft affected over 9 million Americans last year alone, many through phishing schemes disguised as real estate inquiries.
Avoid clicking on links or downloading attachments from unknown sources, as they could contain malware or phishing attempts.
Updated verification methods for legitimate listings:
Research the property and real estate agent: A report from the Better Business Bureau (BBB) suggests that over 85% of verified real estate transactions that underwent agent credential checks reported no fraudulent activity.
Research online reviews: Search for reviews of the seller or real estate agent. Negative feedback or complaints can be a warning sign.
By staying vigilant and following these tips, you can reduce the risk of falling victim to online scams while searching for real estate. Remember to trust your instincts, verify information, and prioritize your online safety.
If you encounter a suspicious listing or suspect fraudulent activity, report it to the online platform immediately to help protect others from falling victim to the same scam
