Buying or renting a home can be exciting, but it can also be risky. Con artists are notorious for taking advantage of eager home buyers and renters. Besides choosing a reputable real estate agent, you can avoid becoming an easy target by knowing how to avoid the three most common real estate scams. And remember, if it’s too good to be true, it probably is.

Equity Stripping

Under the umbrella of mortgage fraud lies equity stripping. According to House Logic, those at high risk of being scammed are homeowners with low incomes, but with a high amount of equity. Someone struggling to borrow a loan might welcome an equity stripper with open arms, thinking they’ve found the answer they’ve been searching for. Yet, that couldn’t be further from the truth. These scammers will urge real estate owners to accept a loan with high monthly payments and hope this will lead to a foreclosure. Once their victim is evicted they will purchase the same home and sell it for profit.

How to avoid this scam: Only accept help with your mortgage from trusted banks or institutions and ignore all solicitations from other outside sources. House Logic also reminds homeowners to never agree to a home equity loan if the sum of the payments is more than 28 percent of their gross income.

Title Fraud

A combination of identity theft and mortgage fraud, title fraud occurs when thieves use stolen personal information to pose as a property owner. He or she will then take out a mortgage, receive the money and leave the real owner with the mortgage payments. The Globe and Mail states that those who rent their homes or have no existing mortgages are at higher risk, since a large mortgage will be easier to obtain under both circumstances. Failing to keep your personal data safe could make you easy prey to this scam and ruin your financial reputation for years.

How to avoid this scam: Title insurance is one of the best ways to protect yourself from title fraud and false mortgage loans. Monitoring your credit reports and personal information with companies like LifeLock can also decrease your risk of your identity being stolen. You can learn more about identity protection on LifeLock’s Twitter, which offers helpful tips and information. You can also learn more on the official IRS website.

Ghost Renting

This complex scam sounds like something out of a movie, but it is not an uncommon situation. It targets homes that are unoccupied by an owner away on an extended vacation or a long-term work-related trip. The thief takes advantage of the empty home by breaking in and posing as a homeowner looking to rent. Once a potential renter is found, he or she will be tricked into signing an official-looking lease contract and be allowed to move in. The con artist will then collect the rent until the real homeowner returns and finds a stranger living in the home.

How to avoid this scam: Steer clear from homeowners who insist rent be paid in cash. You should also try to ask specific questions about the home that only a real owner would know the answers to. Be wary of anyone saying they are “renting on behalf of the homeowner.”

What is Home Equity