The Growing Threat of Real Estate Fraud
Imagine waking up one day to find out that your home has been sold without your knowledge. Sounds like something out of a movie, right? Unfortunately, real estate fraud is becoming more sophisticated, and one of the most alarming scams is Seller Impersonation Fraud.
Scammers use forged documents and stolen personal information to pose as property owners, selling homes or land without the actual owners knowing. They often target vacant land, rental properties, and homes without mortgages, as these are less likely to be closely monitored. While many fraudsters conduct transactions electronically, some have even shown up at the closing table.
With advancements in technology, including artificial intelligence, criminals can now create highly convincing fake identities and documents, making detection increasingly difficult. Staying vigilant and proactive is essential to safeguarding your property from these scams.
How to Protect Yourself from Title Theft
Here are some essential steps you can take to secure your property:
✅ Sign up for deed alert services – Many county Register of Deeds offices offer free alerts to notify you of changes to your property’s records. Check with your local authorities to enroll.
✅ Monitor your property’s status – Regularly check your property records by contacting your county’s Register of Deeds office.
✅ Consider title insurance – This provides a safety net if you become a victim of fraud.
Real Estate Fraud on the Rise
This issue isn’t just affecting big cities—it’s happening everywhere. Just last month, our office encountered a fraudulent transaction attempt. Thanks to our “red flag” procedures, quick action, and detailed verification process, we were able to detect and stop the scam before any damage was done.
Fraudsters often reach out to realtors, but many use For Sale by Owner (FSBO) contracts to bypass professionals. If you're handling a real estate transaction independently, be extra cautious when reviewing purchase agreements to avoid falling victim to fraud.
Spotting the Red Flags: Is Your Deal a Scam?
1. Verify the Identities of Buyers and Sellers
Use a third-party, compliant service for multi-factor authentication (MFA) ID verification.
Be cautious with out-of-state or international buyers/sellers—while many are legitimate, scammers often use distance as a way to avoid direct verification.
2. Look for Unusual or Missing Payment Details
Unclear payment structure – Ensure the purchase agreement outlines payment terms, including down payment, total price, and payment timelines.
Suspicious payment methods – Watch out for wire transfers to offshore accounts or third-party agents handling funds.
Cash or unconventional offers – Cash deals can be legitimate, but be wary of any request to bypass escrow or standard closing procedures. Never accept a personal check as full payment.
3. Examine the Purchase Agreement for Red Flags
Vague or unclear terms – Watch for agreements with ambiguous language regarding contingencies, dates, and terms of sale.
Unusual contingencies – Fraudsters may add unrealistic demands or conditions that work in their favor.
Strange clauses – Be skeptical of any requirement for you to pay for unexpected costs, like property repairs or buyer’s closing costs.
4. Be Cautious with Escrow Requests
Verify the escrow company’s legitimacy – Fraudsters often use fake escrow services. Confirm the company’s credentials with state regulators or trusted real estate associations.
Double-check escrow instructions – Before wiring funds, always verify the instructions through a trusted contact.
5. Watch Out for High-Pressure Tactics
Rushed transactions – Scammers may claim it’s a “limited-time offer” to push you into signing quickly.
Demands for immediate action – Fraudsters may pressure you to skip due diligence. Always take your time to verify everything.
6. Review Signatures and Notary Requirements
Compare signatures – Ensure they match official records.
Confirm notary requirements – Some states require a notary or witness for agreements to be valid.
7. Verify the Buyer’s Agent and Representation
Check agent credentials – Verify the real estate agent’s license through a state regulatory agency.
Be cautious with unrepresented buyers/sellers – Scammers may avoid professional oversight to manipulate deals.
8. Consult Legal and Real Estate Professionals
Seek professional review – Even if handling the sale independently, have a real estate attorney or professional review the agreement.
Purchase title insurance – Working with a reputable title company can protect you from hidden ownership issues.
9. Ensure a Clear Closing Process
Define the closing process – Ensure the contract clearly states the closing date, involved parties, and process.
Work with trusted professionals – Engage with licensed title companies or attorneys to ensure transaction legitimacy.
Final Thoughts: Trust Your Instincts
By staying vigilant and following these steps, you can protect yourself from fraudulent transactions and ensure a smooth, legitimate real estate sale. If something feels off, investigate further before moving forward.
Take action today: Sign up for deed alerts, consult professionals, and always verify identities before proceeding with a sale.