Cautionary Steps when Purchasing Real Estate as a Foreigner and Avoiding Real Estate Fraud

Cautionary Steps when Purchasing Real Estate as a Foreigner and Avoiding Real Estate Fraud

January14, 2019


Fraud and investment scams abound at all levels of the real estate market. When it comes to foreign investors purchasing property in the US they may find themselves victim to an “investment agent” whom embezzled hundreds of millions, if they are not vigilant. There are several cautionary steps to take to safely and wisely invest in the real estate market, especially as a foreign national.

  1. Know the Seller. Prior to making any formal offers or any personal information know the Seller (i.e., is the seller an individual, a trust, company etc…)
  2. Be Prepared to Show Proof of Funds. When making a legitimate real estate purchase the normal practice is for a buyer’s broker to submit an offer to the seller. If the Seller does not require proof of funds prior to any wire transfers or execution of any documents be wary of the transaction.  An offer for purchase usually requires:
  • Proof of Funds
  • Identification Documents
  • If using a lender a Pre-Approval Letter
  • When dealing with certain countries the seller may also want confirmation that getting funds to the US will not be an issue.
  1. Deposit Funds in an Escrow Account. When transferring the money to the US for the purpose of the purchasing real estate make sure you are transferring the funds to an escrow account and not to an individual directly.  If the Seller is demanding that funds be wired to a personal bank account be cautious of the transaction.
  2. Verify Wire Instructions. As a foreign buyer you should also verify that the wire instructions you received are accurate.  You can do this in one of two ways: (a) confirm that the wire instructions match what is listed on the settlement agent’s or title company’s website; or (b) call the settlement agent or title company and confirm the wire instructions.  Once you confirm that the instructions are accurate verify that the receiving bank and/or escrow company is a legitimate company.
  3. Don’t Sign anything You Do Not Understand. Mortgage documents and other necessary documents for a real estate purchase can be lengthy and complicated.  For that reason it is necessary that you take the time to read and understand what you are signing.


If you are a foreigner considering a real estate purchase in the United States, we invite you to call us today at 619-432-5145 for a free consultation with one of our foreign investment attorneys.


Diana Legal