California leads the nation in real estate fraud cases and financial losses. Every year, countless homebuyers, sellers, and renters lose tens of thousands, sometimes hundreds of thousands, of dollars to scams that are becoming increasingly sophisticated.
Most people have heard of the common ones:
1. Wire Fraud Scams
Wire fraud is one of the biggest threats in real estate transactions. Here’s how it works:
Scammers gain access to legitimate email threads between buyers, agents, and escrow companies. Then, they send a fake email to the buyer with fraudulent wire instructions. Thinking the instructions are real, the buyer wires their earnest money deposit or down payment to the scammer’s account.
Once the money is sent, it’s nearly impossible to recover. In some cases, buyers have lost hundreds of thousands of dollars in a single transfer.
How to protect yourself: Always confirm wire instructions in person or over the phone using a number you have verified, never the one provided in an email.
2. Rental Scams
Rental scams are everywhere, especially in competitive markets. Scammers post fake rental listings on Craigslist, Facebook Marketplace, or other platforms. They often steal photos from legitimate listings to make them look real. Then, they collect security deposits or “application fees” from eager renters.
The problem? The scammer does not own the property and there is no rental.
How to protect yourself: Always see a property in person, meet the landlord or property manager, and verify ownership through county records before sending money.
3. Vacant Lot Fraud — The Scam You Probably Haven’t Heard Of
While wire fraud and rental scams make headlines, vacant lot fraud is becoming one of the fastest-growing real estate crimes and it can be devastating for both buyers and legitimate property owners.
Here’s how it works:
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A scammer identifies a vacant parcel of land, often owned outright by someone who lives far away.
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They pose as the owner and contact a real estate agent to list the lot for sale.
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Once a buyer is found, the scammer insists on using their own escrow company, which is fake.
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The buyer sends the deposit or full payment into this “escrow” account. The scammer disappears, and the money is gone.
These scams often go unnoticed until the real owner gets a letter from the county or a call from a confused buyer, wondering why the “sale” fell apart.
Protect yourself by working with a licensed, competent, real estate agent:
- They'll know which escrow companies are legit, and which are not.
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They'll spot scams like these before damage is done.
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They'll verify both parties identities before any wires are initiated.
The Bottom Line
Real estate scams are becoming more sophisticated every year, and California’s high property values make it a prime target for criminals. Whether you are buying, selling, or renting, the safest approach is to slow down, verify every detail, and work only with trusted professionals.
