Seller impersonation fraud gains ground in real estate
CONTRA COSTA COUNTY, CA (Aug. 24, 2023) — Sophisticated fraudsters have been impersonating property owners to illegally sell commercial or residential property.
My representative at Chicago Title Co. sent out information about this, and I thought it was important to share.
These criminals use the real property owner’s Social Security and driver’s license numbers in the transaction, as well as legitimate notary credentials that may be applied without the notary’s knowledge. They prefer using email and text messages to communicate, allowing them to mask themselves and commit crimes from anywhere without being caught.
Due to the types of property being targeted, it can take months or years for the actual property owner to discover the fraud. Property monitoring services offered by county recorder’s offices are helpful, especially if the fraud is discovered prior to the transfer of money.
To pull off these schemes, criminals search public records to identify real estate that is free of mortgage or other liens and to identify the property owners. Properties often include vacant lots or rentals.
Fake listing
Posing as the property owner, the fraudster contacts a real estate agent to list the property for sale below market value to generate immediate interest. As offers come in, they then show a preference for a cash buyer. They quickly accept an offer and then refuse to sign closing documents in person, instead using a remote notary signing.
The criminal or a co-conspirator impersonates the notary and provides falsified documents to the title company or closing attorney. The title company or closing attorney unwittingly transfers closing proceeds to the criminal. All communication is electronic, not in person.
The scheme is often discovered when recording the transfer of documents with the relevant county.
These crimes have particularly affected the elderly and foreign real estate property owners as there are no means to notify the legitimate owners automatically. The burden of verification is on the real estate and title companies.
To prevent this type of fraud, buyers should:
- Conduct open-source research for the identity and a recent photo of the purported seller.
- Request an in-person or virtual meeting to see government-issued identification.
- Be alert when a seller accepts an offer below market value in exchange for receiving the payment in cash and closing quickly.
- Use trusted title companies and attorneys for the exchange of closing documents and funds.
Jennifer Stojanovich is an owner/broker with Better Homes Real Estate. Send questions and comments to jennifer@bhrbroker.com