Common Real Estate Fraud and How to Avoid it

Anyone can fall victim to real estate fraud, it’s more common than you’d think. As technology advances, real estate scammers are finding new and creative ways to take advantage of homeowners and potential home buyers. But, thankfully there are ways you can protect yourself against real estate scams. First and foremost, one of the best ways to avoid real estate fraud is to know the common scams and be able to identify them.

Here are some of the most common real estate scams and how to avoid them:

Home Improvement Scams

There are multiple types of home improvement scams you should be aware of. One common scam is when contractors agree to do work for a discounted rate, and leave the homeowner to deal with partially incomplete or substandard work.

Equity Fraud

Unfortunately, equity fraud happens when someone forges a homeowner’s signature on a deed and steals the equity from their home in the form of loans against the property. Then, they don’t make any loan payments which can result in property foreclosure.


If you’re an investor, here’s one to watch out for. Sometimes, investors can be lured into buying a property by thinking they’re saving it from foreclosure when really the documents were falsified. Flipping can also be fraudulent if not executed properly. For example, if someone buys a property and resells it at an inflated price based on a fake appraisal value.

Fraudulent Loan Origination

This happens when unqualified buyers obtain funds for FHA insured mortgages by falsifying borrower information like income, assets, and their inability to pay.

Warning Signs for Real Estate Fraud

Anyone can be vulnerable to real estate fraud and identity theft, however, the elderly and economically challenged traditionally have been targeted. Below are some common warning signs of real estate fraud:

• You receive official documents indicating a transfer of property and you have no knowledge of it.
• You did NOT receive a property tax bill. This can be the first sign of fraud.
• You receive mortgage documents or payment books for loans you don’t have.
• You receive unexplained or altered property documents.
• You receive documents that you did NOT sign or were signed by someone you know was incompetent or deceased at the time.
• You did NOT sell, borrow or make a gift transfer of property yet receive notifications to that effect.
• You believe fraud or misrepresentation has occurred in a transaction you’re involved in.

Information provided by Orange Coast Title Company.

Why Title Insurance?

“Here are the most common fraud scenarios that title insurance handles and takes liability for. One-time fee, per transaction, and insurance stays in place until you sell. California is the most litigious state in the country. Mitigate liability and hassle. Go with an established title insurer with discounts for seniors, first responders and veterans.” – Kevin Kelly, 35 years in title and expert witness for Southern California courts

If you think you’ve been a victim of real estate fraud, please report it immediately! You can check your county website for what’s been recorded against your property. If you have any questions, give us a call at 562.896.2456.

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About the Author

Shannon Jones has been selling real estate since 1998 and specializes in listing and marketing homes. She has consistently been one of the top Realtors in the Long Beach area. Prior to her award-winning career in real estate with the Shannon jones Team, Shannon has had successful careers in journalism and public relations. She holds a bachelors degree from UC Irvine and a masters degree from UC Berkeley. Shannon holds E-Pro, CDPE (Certified Distressed Property Expert), and PSC (Pre-Foreclosure Specialist) certifications. Shannon is very personable and maintains a very strong moral compass, always putting the best interest of home buyers/sellers above monetary goals. A California native, Shannon enjoys gardening, travel, reading, cooking and poker when she’s not selling homes MY DESIGNATIONS Lic# 01247705 | CDPE (Certified Distressed Property Expert) | E-Pro | PSC (Pre-Foreclosure Specialist) MY SERVICE AREAS Anaheim Bellflower Buena Park Carson Cerritos Cypress Downey Fountain Valley Garden Grove Huntington Beach La Palma Lakewood Long Beach Los Alamitos Los Angeles County Norwalk Orange County Rossmoor San Pedro Seal Beach Signal Hill South Bay Westminster