Related to last week’s risk reduction tips for cybercrimes and wire fraud, this week, we explore deed fraud, including the impersonation of a property owner to sell or taking possession of a property via fraudulent deeds. The National Association of Realtors provides the following overview of how dead fraud can occur and best practices to protect yourself, whether you’re an agent or a consumer looking to buy or sell.
Deed fraud encompasses a range of crimes where the criminal seeks financial gain through a scheme involving real property.
One such scheme is seller impersonation fraud, which is on the rise. According to the American Land Title Association, in April 2024 alone, two in 10 title companies experienced seller impersonation fraud attempts.
Most recently, the FBI has warned about an increase in quit claim deed fraud, where criminals forge documents to record a fake transfer of ownership. And, in an informal survey conducted by NAR, 63 percent of respondents were aware of deed fraud in their market within the last year.
How does it work? Scammers posing as property owners target lien-free vacant land and unoccupied properties, tricking a real estate professional into listing the property for sale. In a “too good to be true” scenario, the seller asks to list below market value and wants a quick sale, preferably for cash. Communication is by text or email and the seller wants a remote closing, as they’re out of state or the country.
These scams defraud innocent buyers and can result in liability for unwary agents. State regulators may take action against a licensee for negligence in failing to exercise due diligence to verify the seller’s identity and ownership interest.
Real estate professionals should stay informed about these evolving threats to property ownership, and help educate consumers to stay alert.
Risk Reduction Tips for Dead Fraud
1. Look out for red flags when approached to list a vacant parcel or unoccupied property, such as insisting on a quick sale and all-cash buyers, accepting less than market value, and refusing to meeting in person or by videoconference.
2. Exercise due diligence to verify the purported seller is the actual property owner, which may include requesting a face-to-face meeting, asking for specific details about the property, and sending a certified letter to the owner’s address of record on file with the county recorder.
3. Conduct independent research to confirm the property owner, such as looking online for a recent photo or speaking to a neighbor.
4. Make sure you or the title company select the remote notary at closing.
5. Report a suspected vacant land scam to local law enforcement and file a complaint at www.ic3.gov.
In addition to these tips, call Greater Chattanooga Realtors so we can remove the listing from the multiple listing service and any ads related to the syndication of listing data.
While fraudsters continue to target real estate, we remain diligent in education our realtor members and their clients on such scams in hopes of reducing the risk of jeopardizing the transaction or anyone’s personal finances.