Which situation is often present in real estate fraud schemes?

The situation that is often present in real estate fraud schemes is the use of a false appraisal report. In these schemes, fraudsters may produce or manipulate appraisal reports to inflate the perceived value of a property, thus enabling them to secure larger loans than they would be entitled to based on the property's true market value. This artificial inflation can lead to significant financial losses for lenders and buyers, as the property is often not worth the amount stated in the fraudulent appraisal.

In the context of real estate fraud, having no expert assistance at closing may signify other red flags, but it is not the most definitive indicator of fraud. Additionally, the involvement of an arm's-length legal representative usually indicates a more legitimate transaction. While these other factors can certainly be present in various scenarios, the false appraisal report is a direct and common tactic specifically tied to fraudulent schemes within the real estate sector.