Collins: Real estate scams are on the rise

In the new age of technology, consumers and real estate professionals have countless opportunities to streamline the home-buying transaction process. However, while technology is crucial and often simplifies transactions, its widespread adoption has also introduced significant risks, including scams and other fraudulent activities, within the real estate industry.

Scams and fraud in the real estate industry have exploded over the last few years. The complexity and depth with which the perpetrators use technology to trick homebuyers have reached new heights.

With 1 in 5 homeowners reporting they have received a fraudulent message before closing, understanding how these scams work is critical for consumers to protect their privacy, funds, and assets.

A growing form of fraud is title fraud, also known as deed theft. This occurs when someone illegally transfers ownership of your property without your knowledge, often using forged documents or fake IDs.

The criminal’s goal is to steal your money by making it seem like someone else owns your property or that you transferred your property to someone else. When left unaddressed, title fraud can result in foreclosure or eviction — even if you still live in the home.

Hear from homeowner Raegan Bartlo, who shares her experience of losing a $266,000 down payment in a real estate wire fraud scam:

Just days before closing on her dream home in the Shenandoah Valley, Bartlo received what looked like a routine email from her title company, with wiring instructions for her $266,000 down payment. It wasn’t her title company. It was a scammer who had been watching her email thread, knew her closing date and was waiting for the right moment to strike.

These scams are not limited to consumers, but also affect real estate professionals. For instance, a growing phishing scam targets listing inquiries being sent through popular real estate portals. The scam begins with what appears to be a legitimate inquiry referencing an actual property listing, often followed by friendly messages requesting a quick Zoom call to discuss details.

According to reports from real estate agents across multiple markets, Zoom links are malicious and designed to install malware onto a device. Once installed, the software can monitor email conversations involving title companies, lenders and clients to intercept and alter wire instructions — a common tactic in real estate wire fraud schemes.

As real estate transactions become increasingly digital, the risk of scams and fraud continues to grow alongside the convenience that technology provides. From title fraud and wire transfer schemes to sophisticated phishing attacks targeting both consumers and industry professionals, staying informed is one of the most effective ways to protect your finances and property.

Equally important is working with a trusted real estate professional who can help identify red flags, verify critical transaction details, and guide you through each step of the process. Experienced Realtors, lenders and title professionals serve as an important layer of protection by helping clients navigate complex transactions safely and securely. By combining the benefits of technology with the expertise of qualified real estate professionals, buyers and homeowners can significantly reduce their risk and move forward with confidence.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected].