Picture this – you are a real estate agent and one day receive a call out of the blue from a seller you have never met, asking you to sell a piece of property they own. It’s great news, all of your hard work marketing yourself has paid off or your reputation has grown where you can generate business on your name alone! The seller is an easy client – they occasionally call or text, but mostly email and never want to meet in person. You put the listing on MLS, attract a buyer, and close the deal.
However, unbeknownst to you, it turns out the person on the other end of the phone that day was not who they said they were. The property they had you list was vacant land, so getting access to it wasn’t a problem. The name they gave you, their caller ID, and their email address matched the name on the tax rolls, but you never met them in person or looked at their ID. The title company suggested a mobile notary, but after pushback from the seller, they conceded and let them use their own notary and the deal closed without a second thought.
What is Fraud For Property?
Unfortunately, this scenario describes an increasingly popular type of crime called “Fraud for Property”. At the very basis of it, criminals take advantage of real estate agents’ and title companies’ desire to close a transaction and attempt to impersonate another individual who owns a property. Through careful social engineering, these criminals are able to attack certain weak points in our industry at large to divert large sums of money from unwitting buyers to their bank accounts and defraud the title company.
In order to prevent these criminals from succeeding, agents must take care when listing vacant land or distressed properties that are sold for lot value. Since there is no home that needs to be accessed, it is easier for a criminal to convince you of their ownership. Oftentimes the mailing address is an office or P.O. box, which makes verifying an owner’s identity difficult.
While we all have busy schedules, a seller refusing to meet in person or stating that they are traveling around the country for months at a time can be a red flag. Refusing to communicate over the phone can be a cause for concern as well, as it could be an attempt to hide an accent or way of speaking that may create suspicion. Grammatical mistakes in written communications can be an indicator that the seller is operating out of another country, as many fraudsters are. Take note of uncapitalized I’s, as foreign computers do not automatically capitalize them.
Preventing Fraud For Property
A title company should always require that a third-party mobile notary be sent to the seller to sign closing documents. This ensures that the seller is not using a notary they have paid off, a stolen notary stamp, or a notary who is complicit in their attempted fraud. There is a cost associated with this service, but pushback on the notion of using one to the point of threatening to move the transaction is a common occurrence in this attempted scam.
Title companies are well-equipped to assist in determining if a seller is legitimate or not. However, agents are the first line of defense for preventing this kind of crime. If you find yourself in a transaction that fits this bill, I encourage you to trust your gut and let the title company know. The worst-case scenario is the title company does a little more leg work to earn its keep. The best case is that you have successfully detected fraud, and saved the buyer, the title company, and yourself from being victimized.
