Seller Fraud
Seller fraud is real and there has been a huge uptick in seller fraud cases. Seller impersonation fraud is where a fake seller tries to sell property they don’t own and impersonate the owner. It is most common for absentee owned properties such as second homes, vacation homes, and vacant land.
The criminal searched public records to identify real estate that is free of mortgage and other liens and the identity of the property owner. They then contact a real estate agent to list the property for sale and request it be listed at below current market value. They might make mention for a preference of cash buyers and quickly accept an offer. Their personal notary would likely also be involved in the scam and provide falsified documents to the title company. In the end the title company unwittingly transfers the closing proceeds to the criminal.
Fake sellers will offer a quick closing and quick sale with low asking prices or accepting low offers, they won’t have proper identification or the signatures won’t match, they will want to use a personal notary instead of one provided by the title company, and they are hard to get ahold of and generally will only communicate over email or text message. They will make excuses why they can’t talk on the phone or meet in person. In addition, they will offer incentives or cut corner for a quicker closing.
The fraud is often discovered when recording the transfer of documents with the county. It has particularly affected the elderly and foreign property owners but can involve any property owner. These scams have caught the eye of the U.S. Secret Service and have been getting some news coverage. Florida properties and other popular vacation areas have proven to be popular targets but it is happening all across the world. Here are some examples of seller impersonation attempts from across the country and a video I recorded a couple weeks ago about my experience with it:
- A title agency in North Carolina reported a loss of $33,000 from a vacant lot transaction. The title agency and the real estate agent were scammed by an imposter seller. Luckily, it was reported quickly, and they were able to work with the U.S. Secret Service to freeze and return the funds.
- A title company customer in Ohio followed the playbook to stop seller impersonation fraud almost perfectly. The “seller” of a vacant lot contacted the real estate agent online and the Realtor listed the property for sale. The “seller” was very pushy about transferring money and the amount they’d make. The seller claimed to owe more than the $30,000 sale value and was anxious to receive the funds Luckily, due to all of these red flags, the title company identified the fraud and stopped it in time.
- Another title company in Florida avoided a sizable $110,000 fraud loss. A “seller” living in Vermont contacted a real estate agent online to list a vacant lot and the agent listed the property and secured a signed offer. But when the agent involved the title company, the title company identified red flags as the “seller” asked to use their own notary due to being out of state.
It is important to remember that things are rarely too good to be true. It is key for everyone involved to stay vigilant when it comes to fraud. Realtors, lenders and other industry experts look out for the red flags that could indicate fraud. When things seem off, they usually are. My team (title companies, lenders, etc) and I work hard to inform you of the potential dangers that exist out there. We also work hard to protect you and your property. Thank you for trusting me to be your agent!
