In the United States, purchasing a second-hand (resale) home is one of the most common ways for families and investors to enter the real estate market. However, due to the complexity of the transaction process and the number of parties involved, scammers often take advantage of information asymmetries to exploit buyers. Whether you are a first-time homebuyer, a seasoned investor, or a foreign purchaser, identifying and avoiding fraud is essential for a safe transaction.

This article outlines the most common types of real estate fraud in the U.S. resale market, real-life case studies, and practical tips to help you recognize and avoid falling victim to scams—ensuring you make informed and secure decisions.

I. Understanding the U.S. Second-Hand Property Transaction Process
Before examining common scams, it’s important to understand the standard steps involved in a typical second-hand home purchase in the U.S.:

Finding a property

Hiring a licensed realtor

Making an offer and negotiating terms

Signing the purchase agreement

Title search and home inspection

Escrow and mortgage processing

Closing and final transfer of ownership

Scammers often exploit vulnerabilities at any of these stages—especially where trust, documentation, or payment is involved.

II. Common Types of Fraud in Second-Hand Real Estate Transactions
1. Fake Property Listings
Fraudsters post listings for properties that don’t exist, often at unusually low prices, to lure buyers. Once interest is shown, they request a “reservation deposit” or “good faith payment” to hold the property. After the money is sent, they disappear.

Red flags:

The price is significantly lower than market value

The seller insists on fast payment to “secure the deal”

The address or ownership cannot be verified through public records

2. Impersonating the Property Owner or Agent
Some scammers pretend to be the actual homeowner or a relative, using fake documents and ID to “sell” the property to unsuspecting buyers or agents.

Red flags:

No valid proof of ownership is provided

The person avoids using escrow services

Their name/license is not found in official real estate commission databases

3. Title Fraud
Fraud rings forge signatures, use stolen identities, or fabricate notary seals to illegally transfer ownership of a property. They then mortgage or sell the home to collect illicit funds.

Red flags:

Title records show inconsistencies or unexplained changes

The title insurance or search company appears suspicious

Foreclosure or lien notices are received without any authorized transactions

4. Fake Title Reports or Falsified Inspection Scams
Scammers may forge title reports to invent ownership disputes or claim legal issues, demanding extra fees to “resolve the matter.” In some cases, they stage fake home inspections and exaggerate problems to pressure buyers into renegotiating prices or abandoning the deal.

Red flags:

The title or inspection company cannot be verified

The report contains vague language or unexplained fees

No issues are reflected in public property databases

5. Escrow Wire Fraud
One of the most dangerous and sophisticated scams involves hackers intercepting or spoofing emails to pose as escrow agents or attorneys. They send fake wire instructions, tricking the buyer into sending funds to a fraudulent account.

Red flags:

The sender’s email address is subtly different from the real one

Last-minute changes to payment instructions

The account provided is a personal or overseas account

III. Real-Life Case Studies
Case 1: “Relative of the Owner” Scam in Los Angeles
In 2022, a Chinese student studying in California found a great apartment deal on Craigslist. The “seller” claimed to be the property owner’s sister and demanded a $3,000 deposit to reserve the unit. The student wired the money without verifying ownership. The listing turned out to be fake, and the scammer disappeared.

Lesson:
Always verify ownership through official property records before making any payment. Never trust a stranger’s word alone.

Case 2: Escrow Email Fraud in Texas
In 2023, a couple in Texas received an email from what appeared to be their title company with instructions to wire $80,000 as a down payment. The email was nearly identical to real communications. Only days later did they learn the real title company never sent the email. The funds were lost.

Lesson:
Always confirm wire instructions by phone or in person before sending any funds. Do not rely solely on email.

IV. How to Recognize and Prevent Real Estate Fraud
1. Always Use Licensed Realtors and Attorneys
Each U.S. state has a real estate licensing board. Verify that your agent or attorney is licensed and has a good track record via the official state real estate commission website.

2. Research Property Listings on Verified Platforms
Stick to well-known property websites such as Zillow, Realtor.com, and Redfin. Always cross-check property details with the local County Recorder’s Office or official property records.

3. Use Only Trusted Escrow Services for Payments
Avoid any request to transfer money to a personal or overseas account. In the U.S., all real estate payments should go through a neutral third-party escrow company.

4. Insist on Formal Contracts and Retain All Records
Get all agreements in writing. Don’t accept verbal promises or informal documents. Keep copies of emails, signed contracts, wire receipts, and inspection reports.

5. Protect Against Email Scams
Double-check sender email addresses carefully

Verify all payment instructions by phone

Enable two-factor authentication on your email accounts

V. Special Considerations for Foreign Buyers
Overseas investors from countries like China, Singapore, and Malaysia are often more vulnerable due to language barriers and unfamiliarity with U.S. laws.

Recommendations:

Hire a local, licensed real estate attorney to oversee the entire process

Don’t trust agencies claiming to “handle everything” on your behalf

Request bilingual (English/Chinese or English/Malay) contracts and documents

Be wary of being rushed into a quick purchase without full due diligence

VI. Final Thoughts: Awareness + Verification = Safe Transactions
Buying a second-hand home in the U.S. can be a rewarding investment, but it’s also one of the biggest financial decisions you’ll make. With scam tactics becoming more advanced, even experienced buyers can be fooled. The key to staying safe is maintaining vigilance, strictly following procedures, and verifying each step of the transaction.

A home can be replaced, and money can be regained—but the security of your investment depends on doing your homework and never letting your guard down.