Top Two Real Estate Scams People Fall For

Updated on July 6, 2022

Our real estate fraud attorneys at Schorr Law are frequently called upon to resolve all sorts of fraudulent real estate deals. We have a lot of experience dealing with real estate scams that even the smartest people fall for.

1. Forged Deeds

The most common scam we see are sales involving forged deeds.   This occurs when the seller really is not the true owner of the property, instead they have forged the prior owner’s signature in order to obtain legal title to the property.   The average buyer has no way to protect themselves against a forged deed.  There is no protection because even if the buyer had no knowledge of the forgery, the buyer can be forced to give the property back to the person whose name was forged.  The forged deed can be made void – returning ownership to the original owner.  Moreover, there are no systems in place at most county recorder’s offices – where deeds are recorded – to proceed against forged deeds.

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Best Way to Protect Against a Forged Deed

The best way to protect against a forged deed and losing the entire house is to obtain title insurance. Title insurance is a type of insurance that the buyer can buy to make sure that they are getting clear title to the property.  If a buyer obtains title insurance and someone comes out of the woodwork claiming they are the true owner of the property then the buyer can tender (give) the claim to their insurance company – the title insurance company – and have them either defend other claims to the property or pay the buyer the value of the purchase.  This can be great protection for the buyer against real estate fraud.

2. Co-Owners of Property

Another scam we see usually involves co-owners of property.   An example of a situation we see is where one co-owner (boyfriend) of a property approaches the other co-owner (girlfriend) and tells them that they are going to refinance the mortgage for the property and need to obtain their signature in order to get a better interest rate on the loan for the property.    The then trusted co-owner (boyfriend), tricks the co-owner (girlfriend) to give them their interest in the property for free by having them sign a deed providing for the same.  The tricked co-owner does not realize they are giving away the property and thinks instead that they are simply signing complicated loan documents.  Many sophisticated co-owners of real estate do not understand the legalese of deeds, quitclaim deeds,  deeds of trust, mortgages, refinance terms  and can get literally robbed of their ownership interest.  The best way to protect against this cheap trick is to read all relevant documents, not be rushed into any transaction and to consult a real estate lawyer.

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To inquire about scheduling a free consultation with one of our top rated attorneys, please do not hesitate to contact us. You can use our Contact Form to send us a message, or give us a call at (310) 954-1877.

By Zachary Schorr, esq.