Real estate fraud accounted for 9,521 complaints in the FBI’s Internet Crime Complaint Center annual report for 2023. This was a decrease in the number of incidents reported in 2022, which had 11,727 reports of real estate fraud.
The total amount of financial losses attributed to these scams also generally declined in each state.
However, some individuals lost larger sums of money than they did the year prior.
Alice Sibley, an FBI intelligence analyst, said part of the reason there may have been a larger monetary loss for individuals in 2023 could be the simple result that property prices tend to be higher now than they were two or three years ago.
“When you have higher value properties, and real estate fraud that's targeting those ... you’re going to have higher loss amounts per property,” Sibley said.
Scammers also often target victims who live in wealthier areas.
The drop in real estate fraud in 2023 could stem from spiking mortgage rates and the lower numbers of listings, according to Shashwat Pradhan, a senior manager of product management at LifeLock.
“Scammers pay attention to these types of trends,” Pradhan told CoStar. “If they can’t get rich quick by taking advantage of the real estate market, they’ll turn to other methods, like ransomware and data breaches, which both increased in volume between 2022 and 2023.
COVID-19 pandemic accommodations have increased fraud risk
While the total number of victims of real estate fraud decreased in 2023, it has been easier for people to conduct these kinds of scams by taking advantage of accommodations made since the onset of the COVID-19 pandemic to allow for more electronic communication in processing deals.
Incidents of real estate fraud spiked during this time, but the total reported complaints have declined since 2020.
People now feel too comfortable doing real estate deals over the phone or via email, the FBI said.
“You have more and more people engaging in the use of this technology and the internet and online transactions and wire transfers that maybe were not very comfortable with it five to six years ago,” the FBI's Sibley said. “That can lead to sort of an increased susceptibility or sort of opportunity rather for scammers to take advantage of that."
A version of phishing called business email compromise is one common way for people to be victimized in real estate fraud scams, according to Sibley and Nick Berta, a supervisory special agent in the FBI’s economic crimes unit.
Business email compromise, which accounted for $2.9 billion in loss in 2023 according to the FBI, is a prevalent email scam involving a phishing method to obtain a company or employees’ emails and soliciting them to click on a link so that they have access to the victim’s emails.
"Somebody who has access to information around the closing of real estate sales may have their email address compromised, and then a scammer will access and usually wait and watch the communications and emails until they see that there is a deal about to be closed," Sibley, said. "And then what they do is they divert a wire transfer that closes the deal."
New FinCEN rule on certain transfers of residential real estate
Consumers reported struggling with awareness and education of real estate fraud.
Berta said timeshare fraud is the second most common type of incident involving real estate fraud.
“We will see victims that have sent hundreds of thousands of dollars or even millions when their timeshare is worth very little compared to that amount of money they are sending in advance, believing that they will get that money back on top of their sale or rental,” Berta said.
Scammers may be more deterred from committing some real estate fraud crimes in the future as a result of a new rule enacted in August by the federal Financial Crimes Enforcement Network, commonly referred to a FinCEN, a bureau with the Department of Treasury.
“The rule requires, on a nationwide basis, certain persons involved in real estate closings and settlements to report information to FinCEN about specified transfers of residential real estate that are a high risk for illicit finance,” according to the press release.
This would make it more difficult for illicit actors to hide under the anonymity that all-cash sales typically give them, the government said.
The final rule officially goes into effect on Dec. 1, 2025.