• October 26, 2023
  • News

Scammers Eye Vacant Land for Real Estate Fraud

Real estate scams are no novelty, but the sophistication and audacity with which they’re executed have escalated. Today, a surge in fraudulent activities targeting vacant lands is on the rise, exposing potential buyers, property owners, and real estate professionals to considerable risks.

Rise of the Title Pirates

The FBI’s Internet Crime Complaint Center has raised alarms about the increasing losses from real estate and rental scams, with a staggering $396 million reported last year alone. Vacant lands, in particular, have become the new hunting ground for these fraudsters. According to Charlie Lee, the senior counsel and director of legal affairs at the National Association of REALTORS®, scammers are diving deep into public records, pinpointing vacant properties or those without any mortgage or lien.

Posing as landowners, these scammers convince real estate agents to list their property, dangling tempting offers that seem too lucrative to refuse. For instance, the ‘seller’ proposes a price below the market rate, ensuring it piques interest and sparks rapid sales, preferably cash ones.

But there’s a darker side to this tale. Victor Petrescu, a seasoned real estate attorney, highlights the alarming rise of “title pirates.” These culprits craft forged deeds and other sham documents to wrongfully claim a property’s title. In numerous instances, the scam remains unnoticed until vast sums are already transferred to these con artists. By then, what remains is a tangle of complications for the actual owners and the real estate intermediaries.

Red Flags to Detect Real Estate Scams

Being forewarned is forearmed. Charlie Lee underscores specific telltale signs that should immediately raise suspicions:

  1. Unrealistic Pricing: If the ‘seller’ wishes to sell the property significantly below its market value, it’s time to be cautious.
  2. Exclusive Digital Communication: A scammer typically avoids in-person interactions, often citing reasons like being out-of-state or abroad. They’ll rely predominantly on electronic communication.
  3. Remote Closings: They might insist on a remote closure of the deal, even offering to arrange a remote notary. This should ring alarm bells as the scammer might even go to the extent of mimicking a notary and pushing counterfeit documents during the closing.

Safeguarding Against Scams

For real estate professionals, due diligence is non-negotiable. Here are some measures to ensure the person on the other end is genuine:

  • Seek Concrete Identification: Always ask for multiple ID proofs and tangible proof of ownership.
  • Insist on Face-to-face Interactions: While technology facilitates remote communication, try to organize at least one direct meeting.
  • Test their Property Knowledge: Ask questions that aren’t easily answerable from public databases or online information.
  • Verify Notaries: If a seller insists on arranging a notary, make sure the professional is a thoroughly vetted, independent, and approved remote online notary.

Finally, before any money changes hands, ensure the seller can produce a voided check accompanied by a disbursement authorization form.

In an era where scams are ever-evolving, staying informed and vigilant is the best line of defense for real estate professionals and buyers alike.

Create Your Order.
Easy as 1, 2, 3.
Ok, and 4.

Start Your Order Now

Show Me
The Money.

Rate Calculators

Netflix and Title Services?

Find Your Office