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Real Estate Fraud: Vacant Land and Rental Property Scams
Scammers are everywhere, and many of us take precautions to avoid them. But what about when it comes to your biggest investment—real estate property? Right now, there is a land scam that is becoming more prevalent throughout the country, and it involves primarily vacant land or rental properties.
How the vacant land and rental property scam works
- A criminal begins searching through public records and looks for properties that are free of mortgages or any other liens (often vacant lots or rental properties). They then identify the owner of the property.
- The criminal pretends to be the property owner and contacts a real estate agent to list the property. They will often ask for the property to be listed below market value to make the sale happen as quickly as possible.
- The criminal will communicate via text or email only.
- The criminal will show preference for a cash buyer, and quickly will accept the offer.
- The criminal will refuse to sign any closing in-person and will request a remote online notary closing.
- In many cases, the criminal (or co-criminal) will pretend to be the notary and even provide falsified documents to the title company or real estate attorney.
- The proceeds from the sale get sent to the criminal.
Discovering you’ve been scammed, and how to prevent it
Often times, the fraud is discovered when the county agency the sale took place begins recording the transfer of documents. According to the United States Secret Service Cybercrime Investigations Division, “This scheme has particularly affected elderly and foreign real property owners, but it is not limited to these groups, because there are no means to automatically notify the legitimate owners. Therefore, the burden of verification is on the real estate and title companies.”
Here’s are some ways to protect your clients or yourself from being victims of this scam:
- Do background research and look up the identity or a picture of the property seller.
- Make an in-person or virtual meeting mandatory in order to see their government issued identification.
- Look for red flags: a seller asking to list below market value or accepting an offer that’s lower than what the property is worth if the payment is cash and the closing is quick.
- Always use a trusted title company who understands how to navigate this type of fraud, specializes in conducting secure remote online notary closings and can ensure the property actually belongs to the seller you’re working with.
Partner with a trusted title company to keep you safe
At Velocity Title, we pride ourselves on meeting the strictest security requirements for safe and effective remote online notary closings. In fact, providing a government issued ID so we can verify your identity is one of the first steps in the process. Our job is to make sure each and every closing we conduct is done right and exceeds our clients’ expectations.