Owning your home provides you with many benefits and protections. However, homeownership also comes with responsibilities, including the need to protect yourself from certain scams. Here are some examples of common scams that target homeowners and how you can guard against them.

Home warranty scams

This scam is an attempt to pressure you into buying an unnecessary home warranty. It often takes the form of a letter that may be marked “URGENT” or “TIME SENSITIVE”, be printed on official-looking letterhead, contain details about your home and imply that you need to purchase a home warranty. While home warranties in general aren’t a scam, you’re never required to buy one, and rarely if ever is an unsolicited offer your best source for such a warranty.

The easiest way to protect yourself from this scam is simply to discard any of these questionable solicitations you receive. If you are interested in a home warranty, do your research on the topic, and then look up reputable companies to contact.

Mortgage scams

Due to publicly available records, many companies know exactly when you apply for a mortgage or buy a home. As a result, you may be targeted by dubious offers for mortgage services during and after your homebuying process. Common mortgage scams include attempts to convince you to refinance your mortgage at steep fees, set up biweekly payments for a charge or send your mortgage payments to the wrong company.

You can stop some of the solicitations by opting out of credit offers before you apply for a new mortgage. More broadly, you should only accept mortgage advice and services from lenders you trust, be skeptical of any unexpected communications concerning your home financing that you receive and do your research before making any decisions about your mortgage.

Tax reduction scams

After buying your home, you may also begin receiving mailings from companies promising to help lower your property tax burden. They may claim they can reduce your taxes for a fee through new laws or special programs. These letters will often reference the homestead exemption, which is a legitimate tax reduction available in most states to people who live in their homes as their primary residences.

In reality, most legitimate property tax reduction opportunities are free and easy to apply for on your own. You don’t need to pay a dubious company to do this for you. If you haven’t applied for the homestead tax exemption on your primary residence, visit the webpage for your county assessor/appraiser or equivalent department for instructions. Note that not all states and counties offer the same tax-reduction opportunities.

Utility scams

Some regions allow homeowners to select their utility providers, and while choice is a good thing, it also can open the door to scams. In this case, someone may visit your home and claim to be an employee of your electricity or gas provider who needs to see your account information. If you provide this info, they may use it to switch your utility provider to one that charges you more. While you can always switch back later, you may be out any payments you make in the intervening period.

To protect yourself, keep your utility account information secure, only communicate with your utilities through methods you know are legitimate (such as by looking up the company’s website and phone number), and thoroughly research any companies you’re considering switching to.

“We buy homes” scams

You’ve probably seen the ads from companies promising to buy unwanted homes fast for cash. For people in a tough situation with a need to sell, this can seem like an appealing offer. However, many of these companies have a reputation for giving homeowners a raw deal. Some have been accused of paying far below market value on homes or convincing homeowners to sign misleading contracts. In one case, a man says he was told he was signing a document for a home equity loan that in reality was a contract to sell his $100,000 house for $37,500.

Unlike real estate agents, who are required to be licensed and to act in their clients’ best interests during negotiations, many homebuying companies have no such requirements. If you need to sell your home, get an expert opinion on its true value from a real estate agent or appraiser, and consider working with a trusted real estate professional who will represent your interests.


Thankfully, with the knowledge above, you should be able to easily guard against these scams. As a general rule, it’s important to protect your private information, be skeptical of any unexpected communications you receive and deal only with trusted parties that you contact through verified methods.