Moving can be stressful enough without dealing with real estate scams.
The most common scams include transfer fraud, as well as encountering fake buyers and fake landlords.
We take a closer look at what’s involved and how you may be able to avoid falling victim to real estate fraud, depending on whether you’re a homeowner or a renter.
Jim Winters, economic crime director at Nationwide Building Society, said: ‘Property is one of the most expensive things we own, so it’s no surprise that they’re a target for fraudsters.
Watch out for scams: savvy home buyers and renters can protect themselves with estate agents’ top tips Sold.co.uk
“Moving to a new home can often be stressful and with a lot of paperwork we can feel rushed to get things done.
‘When you’re under pressure, it can be easy to overlook the signs of a scam you usually see, putting people at risk of losing their house deposits or money they paid for a holiday home.
“That is why we always recommend that anyone buying a property confirm bank details for their deposit directly with their lawyer, either by letter or over the phone, rather than email, as this could be intercepted.
‘When renting a property, use a trusted rental or vacation rental company and always pay by card where possible to give you more protection. If in any doubt, please contact your bank or mortgage bank.’
House buying scams
The main types of real estate scams listed below have been identified by online brokers Sold.co.uk.
It also outlines some steps you can take to avoid falling victim to real estate fraud.
Friday afternoon fraud
In the so-called ‘Friday afternoon fraud’, a criminal hacks into the e-mail of a buyer or his carrier.
It can happen any day of the week, but committing the crime on a Friday allows the con artist to escape immediate scrutiny, with victims sometimes not realizing they’ve been conned until the following Monday.
The hacker contacts a buyer, posing as a lawyer, and gives him false bank details to transfer his deposit.
The way they achieve this depends on whose account they hacked. They can send emails from the carrier’s real email address, or if it’s the buyer’s emails that have been hacked, they create a new email account with a similar address to the real one, usually with one sign changed.
This allows them to send bogus communications without the buyer noticing the change.
These scammers can take months to strike, monitoring the emails until they have a suitable opportunity to attack, according to Sold.co.uk.
They often gain access to email accounts through data breaches and use software to scan for keywords such as “house sale” or “transfer”.
You can place a restriction on your title so that HM Land Registry cannot register a sale unless a lawyer or carrier confirms that the application has been made by you
It’s important to make sure you have a different password for everything to minimize the risk of being hacked.
Keep an eye on email addresses and watch out for minor changes like removing a letter or adding a period – subtle things that can easily go unnoticed.
Before transferring your entire deposit to your transferee, do some checks to make sure you have the legitimate bank details and you’re not sending it all off to a scammer.
Send a small amount first, say £1, and call them on their registered phone number to make sure they’ve received it. Do not transfer the full deposit until this has been confirmed.
Fake buyers and sellers
Fake buyers can pretend to have placed an offer on your property and withdraw it just before completing it, and they use the information gathered during the bidding process to commit property fraud.
Here the scammer turns the title deeds of the property into their name and can then apply for loans using your home as collateral.
If a hapless homeowner failed to notice that their title deeds have been changed to a scammer’s name, a potential buyer could also be at risk of being scammed.
You can place a restriction on your title so that HM Land Registry cannot register a sale unless a lawyer or carrier confirms that the application has been made by you
Most at risk of falling victim to this type of scam are properties that are vacant because the owner lives abroad, properties without a mortgage, properties that are rented out, and people whose identities have been previously stolen.
Once in their name, scammers can try to sell the property without the real owner noticing.
You can sign up for HM Land Registry property alertsthat lets you know if someone is trying to change your property’s registry so you can take action.
You can also place a restriction on your title so that HM Land Registry cannot register a sale unless a lawyer or carrier confirms that the application has been made by you.
HM Land Registry prevented 43 fraudulent applications in 2021-2022, with an estimated value of just over £31 million. This is an increase in the occurrence of fraudulent applications since 2017-2018, when 24 cases were recorded.
Fake landlords can send a lease to make it look legit, but after you send them a deposit and the first month’s rent, they are never heard from again
Fake holiday homes
People have also fallen victim to scams when buying a holiday home abroad.
Villas and apartments are advertised on sites like Facebook and eBay using photos taken from legitimate realtor websites, and then the scammer will ask for a deposit before you can start viewing the property.
In some cases, you may be convinced to pay the full amount without seeing it in person because the scammer is pressuring you to act quickly by telling you that someone else is about to buy it.
Do a reverse image search to see if the photos have been used elsewhere, and if they’re associated with a broker, contact them directly.
Do not send money until you have seen the property for yourself and confirmed that it is real and actually for sale.
Rental Scams
Fake landlord scams take advantage of rising rents and advertise properties on sites like Gumtree and SpareRoom that don’t exist.
The scammers trust that people need to move in as soon as possible and do not have time to view the property in person.
They may even send a rental agreement to make it seem legit, but after you send them a deposit and the first month’s rent, they are not heard from again.
You may even arrive at the property and find someone else there who is unaware that it is being rented.
Never send money to a host without seeing the property for yourself, or otherwise confirming that the listing is legit and definitely available for rent.
Fake tenant competition
Landlords may try to pressure you into paying more than you need to by enlisting the help of a friend.
The landlord asks someone to attend an open viewing and appear interested in the property you want by offering a little more for a down payment.
If you are also interested in the property, you may be pressured to pay an even higher down payment to secure the listing.
By law in England, deposits are capped and can be up to five weeks’ rent. Make sure you don’t pay more than is legally allowed.