Minh To, of Stockport, Greater Manchester said he was left "scared" and "terrified" after seeing pictures of the five-bedroom home on Rightmove.
Police later discovered two men had stolen his mail and forged his signature in order to falsify the documents needed to auction the house.
Two men have been jailed for their part in the scam at Preston Crown Court.
Mike Haley, deputy chief executive of the fraud prevention organisation CIFAS, said Mr To had been "more vulnerable" to the fraud because he had paid off his mortgage.
Saeed Ghani and Atif Mahmood both admitted conspiracy to defraud.
Ghani, 30, of Polefield Circle, Prestwich, was jailed for seven and a half years.
Mahmood, 42, of Sarnsfield Close, Gorton, was sentenced to two years and nine months.
On Wednesday a third member of the gang, Toma Ramanauskaite, was sentenced for a separate fraud.
Mr To was first alerted to what was going on when he received a phone call from his daughter in November 2012.
He said: "She rang me and said 'where are you going?' I said 'I'm going nowhere'. Then she said 'Why are you selling the house then? I've seen it on Rightmove'.
"I didn't know what to think. I felt terrible. I felt scared."
Mr To logged on to the website to find the advert featured several pictures of his home and was inviting bids starting at £300,000.
The details even included a request that the tenants were "not to be disturbed".
Police later discovered Ghani and Mahmood carried out the fraud after stealing three utility bills from Mr To's mailbox.
Having forged his signature, they then transferred the deeds to his house into Ghani's name.
They put the property up for auction in the hope it would sell quickly, without the need for estate agents to show people around.
Mr To discovered the advert just three days before the auction was due to commence.
The court heard Ghani had carried out a similar fraud targeting a couple in Bolton, using fraudulent passports to transfer the deeds to their £300,000 house into his name.
Working with Ramanauskaite, he also took out driving licences in the names of a couple from Salford, before stealing their savings of £90,000.
Ramanauskaite, 30, of Spring Street, Bury, also admitted conspiracy to defraud and was sentenced to 14 months, suspended for two years, and ordered to carry out 250 hours in unpaid work.
Because Mr To had paid off his mortgage, the men were able to transfer the deeds without needing the extra authority of the lender.
He believes the rules need tightening before more people are targeted.
"It's very simple. The government should make it the law that if you're going to change the land registry deeds you should need two signatures," Mr To said.
Det Sgt Phil Larratt, of Greater Manchester Police, said: "As this case demonstrates, fraudsters can use your identity details to open new bank accounts, request new driving licences and even try and steal your own home.
"We urge the public to secure their mail boxes and employ measures to protect their identities."
An identity fraud victim has described the horror of discovering his £500,000 home up for sale on a property website.