Most Common Types of Real Estate Frauds in California

Aug 06, 2025 | Estate Planning

If you are considering investing in real estate, you may benefit from learning more about the most common types of real estate fraud in California and what state law considers real estate fraud in the first place.

Title Fraud

Title fraud is the illegal transferring or ownership manipulation of documents. This type of fraud tends to involve scammers who may forge signatures to take out mortgages under someone else’s name or try to sell property that belongs to another individual. This crime can take years to notice, only becoming apparent when the victim is losing their ownership rights. In some cases, victims may need to pursue real estate litigation to challenge fraudulent transfers and restore ownership rights.

Value Fraud

Value fraud occurs when a seller tries to conceal any noteworthy property defects, such as past fire damage and/or structural problems. Another example is when fraudulent appraisers imply that a property is worth more than it truly is to earn illegal payments known as kickbacks.

One of the ways you can avoid falling for a value fraud scheme is by hiring an outside appraiser to evaluate the property’s true value by inspecting it thoroughly and determining whether or not there are any hidden issues that decrease the property’s overall worth. If disputes arise, estate and trust litigation may also be involved where inherited property is fraudulently misrepresented or mishandled.

Mortgage Fraud

When an individual provides false information during the loan application process, it is considered mortgage fraud. This kind of fraud can be carried out through what has been dubbed straw buyer schemes, where you use another individual’s identity to qualify for a loan, or document forgery, where an individual falsifies their income and/or employment details to secure a mortgage deal.

While shortcuts and broker guarantees may seem appealing, it is wise to be wary of them and avoid these situations as much as possible. You will also want to carefully verify any document involved in your mortgage application process, keeping an eye out for potential underwriting or scams that may be at play. It is always better to spend more time waiting around than having to use time later to untangle the repercussions of a rushed application, especially since disputes in this area may lead to trust litigation or other complex financial proceedings.

Syndicator Fraud

Real estate syndication occurs when multiple investors work together to pitch in money for large-scale investments. These kinds of investments are often vulnerable to fraudulent schemes. It is easy for a syndicator to lie about the details or even fabricate an entire investment opportunity, taking your hard-earned money as personal gain.

If you have decided that an investment opportunity is worth the risk, be sure to thoroughly vet the syndicate you will be working with. It can be helpful to avoid making any deals without definite documentation and to demand transparency in financial statements. Investors who fail to do this may eventually find themselves in need of trust administration or trust and probate legal assistance to protect their interests.

Foreclosure Fraud

When a homeowner is facing foreclosure, they may become increasingly vulnerable to fraudulent real estate schemes. The emotional intensity and legal complexities may leave them feeling lost, making it the perfect time for criminals to offer fraudulent financial relief.

These scammers will often charge individuals extensive fees for fraudulent services, even going as far as to manipulate them into transferring their property deeds. Instead of providing the relief they promised, they are adding another layer of confusion and pain to an already difficult situation.

If you are facing foreclosure, be sure to avoid schemes that promise you a guaranteed solution. While it may seem like the perfect solution, there rarely is such a thing, and it is always better to be safe than sorry. You may also benefit from consulting a real estate attorney prior to signing over the rights to your home, as they can help protect you from falling for fraudulent schemes.

Wire Fraud

Wire fraud is not limited to real estate fraud, but it can easily become a tool used by those looking to scam potential property buyers. According to the FBI, $16.6 billion was lost in 2024 alone thanks to wire fraud and other cyber scams.

Real estate wire fraud often happens when a scammer uses electronic communication, such as texts or emails, to manipulate victims, leading them on with false promises so that they will share sensitive information or transfer money to the fraudsters. Approximately $145 million was lost to real estate wire fraud in 2023.

While this may feel like a looming threat, there are some strategies you can implement to avoid becoming a victim of wire fraud. Here are some examples:

• Do what you can to verify the sender’s identity: This can be accomplished by contacting said sender through a trusted source instead of using any contact information they may have provided in their message.
• Be wary of unsolicited emails or texts: Scammers need your involvement to steal from you, and they usually do not accomplish this by waiting for you to make the first move. It is common for a fraudster to reach out, asking for personal or financial information. Do not give it to them.
• Trust your instincts: Ultimately, if you feel that something seems off, it probably is. It is wise to be cautious of any request that seems urgent, suspicious, or like a fix-all to whatever real estate problem you may be facing.

Why Hire a Real Estate Lawyer From Barry Law Group

One of the smartest ways you can avoid falling victim to real estate scams is to hire a real estate lawyer. At Barry Law Group, we take it upon ourselves to look into your case and do what we can to protect you from fraud.

FAQs

What Is an Example of Real Estate Fraud?

One of the most common real estate scams in California is renter fraud. This occurs when an individual poses as a landlord and advertises property that is either unavailable or non-existent. They use these fake opportunities to collect things like the first month’s rent, a holding fee, and more from unsuspecting renters

Is Hiring a Real Estate Attorney Worth It?

Hiring a real estate attorney can be worth it. Real estate spending can be a major investment, as well as a very complicated process. There is a lot to consider when looking for opportunities to rent, purchase, sell, and/or invest in property. With so much money at risk, it can be incredibly beneficial to have the added help of a real estate lawyer who can protect you from fraudulent schemes.

When Should I Hire a Real Estate Lawyer?

Ideally, you would hire a real estate lawyer before investing any money or sharing any important information during the real estate acquisition process. Unfortunately, this is not always the case, and you may find you need help after discovering you have fallen for a common real estate scam. Regardless of when you hire a lawyer, you may find it to be incredibly helpful and beneficial.

What Should I Do if I Suspect I Have Been Scammed?

If you suspect that you have been scammed, you should report it to the authorities immediately and connect with a real estate lawyer. Law enforcement can help put a stop to the scamming activity while also working to handle any potential fallout. Sometimes, even when we do everything we can to avoid a scam, we still find ourselves tangled up in a case of real estate fraud.

Hire Barry Law Group Today

While trying to invest in a real estate opportunity may feel daunting, you do not need to face it alone. Contact Barry Law Group today to schedule a consultation and avoid scams.