In recent weeks, there has been a surge in real estate fraud cases involving criminals impersonating property owners to engage with real estate agents and attempt to sell properties they have no legal ownership of. These properties are often vacant or lien-free, making them attractive targets for fraudsters. The scam has become increasingly prevalent, particularly in several California counties, prompting authorities to warn real estate professionals of this growing threat.
Law enforcement agencies, including the San Luis Obispo County District Attorney's Office, are investigating multiple cases of this new scam. The Real Estate Fraud Unit has taken proactive measures by notifying county-wide real estate associations, title companies, and the County Clerk-Recorder's Office of the issue.
Property owners can take action by monitoring their property addresses on trusted real estate websites such as Zillow or MLS (Multiple Listing Service) to ensure their property hasn't been listed for sale fraudulently. They can also conduct a property title search on the County Clerk-Recorder website official record search. If a property owner discovers that their property has been fraudulently listed for sale or sold, they should contact their local District Attorney Investigator immediately.
Understanding the Scheme
The fraudsters begin by searching public records for real estate that is free of mortgages or other liens and identifying the property owner. The properties targeted typically include vacant lots or rentals. Posing as the property owner, the criminal contacts a real estate agent to list the targeted property for sale at a price below market value to generate immediate interest. The fraudster then shows a preference for cash buyers and quickly accepts an offer.
In an attempt to avoid in-person interaction, the criminal will refuse to sign closing documents in person and will request a remote notary signing. At this stage, the criminal or an accomplice impersonates the notary and provides falsified documents to the title company or closing attorney. As a result, the title company or closing attorney unknowingly transfers the closing proceeds to the criminal. All communication throughout the process is electronic, avoiding any face-to-face interaction.
Detection and Impact
The scheme is often discovered during the recording of document transfers with the relevant county. Unfortunately, this scam disproportionately affects elderly and foreign real estate property owners, as there is no automatic notification system in place for legitimate owners. The responsibility of verification ultimately falls on real estate and title companies.
Prevention Measures
To prevent falling victim to this scam, real estate professionals should:
- Conduct open-source research to verify the identity and obtain a recent photo of the purported seller.
- Request an in-person or virtual meeting and ask to see government-issued identification.
- Be cautious when a seller accepts an offer below market value in exchange for a cash payment or a quick closing.
- Rely on trusted title companies and attorneys for the exchange of closing documents and funds.
By staying vigilant and adhering to these prevention measures, real estate professionals can protect themselves, their clients, and property owners from falling victim to this growing scam.
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