Fraud in real estate is evolving fast, and AI is at the center of it.
AI-powered tools are making it easier than ever for fraudsters to impersonate homeowners, manipulate transactions, and create sophisticated fake IDs, according to the 2025 FCT Fraud Insights Report.
Deepfake scams and AI-generated voices
The days of simple identity fraud are behind us. AI-driven deepfake technology is now being used to replace a fraudster’s face with a homeowner’s in real-time during virtual meetings, FCT says. This means that, even on a live video call, a criminal can convincingly pose as a property owner.
“AI text-to-speech tools and real-time voice modulation let fraudsters change their apparent age, gender and accent to better match their story,” the report warns spoofing tools allow fraudsters to mimic real numbers.
Real estate market pressures are fueling fraud
Beyond technology, economic conditions are also contributing to the rise in fraud.
“We often observe a direct correlation between a declining market and increased financial desperation, leading some individuals to take drastic measures,” says Daniela DeTommaso, president of FCT.
Organized crime is also taking advantage of the situation by using ‘straw buyers’—people with clean records who are paid to conduct fraudulent transactions. Wire fraud remains a serious issue as well, with cybercriminals hacking email accounts to intercept and reroute closing funds.
FCT explains, “One particular way fraudsters are leveraging compromised information is (by) gaining access to organizations’ internal systems, especially email accounts. This lets them monitor activity and wait for the right opportunity. When the hacked account sends payment instructions to their client, the fraudster is able to send a faked version of that email instead and redirect the funds.”
Red flags for Realtors
While fraudsters are becoming more sophisticated, the warning signs remain the similar. Some common fraud indicators include clients who refuse to verify their ID in person, requests to send funds to a third party, rush deals (particularly at the end of the month) or a transaction involving a recently purchased, mortgage-free property.
How the industry is fighting back
With fraud techniques evolving rapidly, the real estate industry is stepping up its defences. More companies are implementing multi-factor authentication, biometric security and Know Your Customer procedures to strengthen ID verification, according to the report.
FCT also predicts that the industry “may see the first instance of mortgage title fraud carried out by a non-human actor: the AI tools used by fraudsters can be combined and managed by a single algorithm with its directive shaped by the fraudster, and then deployed for ‘hands-off’ execution.”
AI is not just being used for fraud—fraud prevention experts say it will also be part of the solution. “Financial institutions will likely invest in developing AI-powered defences against AI-powered fraud,” the report predicts.
