Judy (not her real name) in Raleigh, North Carolina, fell in love with a FSBO home. She agreed not to use an agent and paid the homeowner $3,000 in earnest money.
Then the homeowner changed his mind. With no contract signed and no receipt, Judy lost all her earnest money. She trusted the homeowner when she should have trusted an agent.
FSBO scams happen to both buyers and sellers with little recourse besides hiring an attorney. Even with a contract, it can be too costly to get the money back, and even then there is no guarantee that they will be in the home at the end of the day.
Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information.
Some sellers will be scammed based on taking tenancy before closing. But there is more to kicking them out than simply banging on the door!