Beware of "land for sale" scams

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Beware of "land for sale" scams

Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes

A fellow contributor here, John Carbone, sent me a link yesterday to a lot for sale in the Smokies. The price certainly seemed reasonable. It so happened that I know the owner of the lot. He is one of our homeowner clients. I called him last night to ask him if he was selling his lot, and he said "No."

As it turns out, a fraudster posing as the owner listed the land with a local realtor. The fraudster had captured my client's driver's license info, and who knows what else at this time.

Moral of the story: If you are looking at land for sale, or any real property for that matter, make sure it is actually for sale before you start making offers and, more importantly, sending any money.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

I wonder what the angle is.. this would all stop when title report was run.

and EM would or should go to the title company.

its not like fake leasing a home.

its not common for a Real Estate agent to verify ownership of a property prior to listing. I have never had an agent do that to me in all my years at this.. in years past we would open title the second we got the listing. so that would be done. and that would smoke the fraud out. no pun intended there in the smokies.

I know in low value land sales like land geek stuff you see. where values are quite low it is common though to just use QC deed and send cash to the seller.. so an unsuspecting buyer could get hosed that way. But with an agent involved I just dont see how this plays out

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
I wonder what the angle is.. this would all stop when title report was run.

and EM would or should go to the title company.

its not like fake leasing a home.

its not common for a Real Estate agent to verify ownership of a property prior to listing. I have never had an agent do that to me in all my years at this.. in years past we would open title the second we got the listing. so that would be done. and that would smoke the fraud out. no pun intended there in the smokies.
I know in low value land sales like land geek stuff you see. where values are quite low it is common though to just use QC deed and send cash to the seller.. so an unsuspecting buyer could get hosed that way. But with an agent involved I just dont see how this plays out
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
https://www.ksat.com/news/loca...

here is an article about how the scam works. Seems to work really well in places where buyers and sellers aren’t actually involved at closing.
“He said the ruse works like this:”

The bad guys search public records to find vacant properties free of liens.

“They then would then impersonate the owner by creating credentials and email that looks like the name of the owner,” Cronkright said.

Next, they contact a listing agent, expressing preference for a quick sale and cash offer. They often list below market value to make it attractive.
At closing, Cronkright said, they give some reason that they can’t attend in person and request a mobile notary, whom they either give fake documents to or impersonate.

The funds are then wired to the scammer.

“It’s just unfathomable, just thinking that this could happen and nobody would know about it,” Buhidar said.

The scheme may not be found out for weeks when the deed is filed with the county, leading to a potential legal mess.

So, how can the imposter scam be prevented?

“I think it’s a shared responsibility,” Cronkright said. “Do we really know the customer that we are dealing with? Have we properly vetted the true owner before we go down a road where somebody is receiving a wire transfer or a check after closing?”
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @John Carbone:

https://www.ksat.com/news/loca...

here is an article about how the scam works. Seems to work really well in places where buyers and sellers aren’t actually involved at closing.
“He said the ruse works like this:”

The bad guys search public records to find vacant properties free of liens.

“They then would then impersonate the owner by creating credentials and email that looks like the name of the owner,” Cronkright said.

Next, they contact a listing agent, expressing preference for a quick sale and cash offer. They often list below market value to make it attractive.
At closing, Cronkright said, they give some reason that they can’t attend in person and request a mobile notary, whom they either give fake documents to or impersonate.

The funds are then wired to the scammer.

“It’s just unfathomable, just thinking that this could happen and nobody would know about it,” Buhidar said.

The scheme may not be found out for weeks when the deed is filed with the county, leading to a potential legal mess.

So, how can the imposter scam be prevented?

“I think it’s a shared responsibility,” Cronkright said. “Do we really know the customer that we are dealing with? Have we properly vetted the true owner before we go down a road where somebody is receiving a wire transfer or a check after closing?”
seller would have recourse against the title company. but if they did the deal without title company or closing attorney then yes they got scammed..
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
My attorney always holds any escrow money I am putting down.
This minimimizes any scams.
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Ken Boone
Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
3y
@Collin Hays Wow man how fortunate for your homeowner client that @John Carbone sent this to you!
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @John Underwood:

My attorney always holds any escrow money I am putting down.
This minimimizes any scams.

If the seller had their identity stolen like this case though with fake documents and a bank account that he could access, how does having the attorney catch this. Seems like everyone in the transaction could be duped through closing?
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Collin HaysBusiness Member
OP
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
Quote from @John Carbone:
If the seller had their identity stolen like this case though with fake documents and a bank account that he could access, how does having the attorney catch this. Seems like everyone in the transaction could be duped through closing?

My identity was stolen about 2 years ago. Here is how ID theft worked in my case:

- One person captured either my social security number or driver's license number, and "sold" the number(s) to another party for a fee.

- The party that purchased the number(s) specializes in using the number(s) to mine for a trove of data. Property records, bank accounts, brokerage accounts, credit card numbers, etc. This is called a "bundle."

- The bundle is then sold off to party 3.

- Party 3 then sells off parts of the bundle to other, unrelated parties. So criminal 1 might attack your credit card accounts, criminal 2 might try to sell your real estate to other people, criminal 3 might try to hack your investment accounts, criminal 4 might hack your bank accounts, and criminal 5 hacks your email and changes your passwords. You can't access it any longer, but they can. Imagine all of the sensitive things on your email that someone else now controls, and there's not a thing you can do about it. All of this happened to me, except criminal 3 was not able to hack my brokerage account, although they tried multiple times. Out of caution, Fidelity closed the account, opened a new one, and applied extra security measures. They did hack my Coinbase account and stole $20,000. I eventually recovered that money but I had to file a suit against Coinbase.

ID theft is nothing to take lightly. The tentacles are almost infinite. It took me about 18 months to clean everything up, and probably over a thousand hours of my time. Even now, I worry about my email that I no longer have access to, and what "bad guys" read every day from unknowing senders continuing to use that email address.
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Collin HaysBusiness Member
OP
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
One more thing: If you think "Two Step Authentication" is a fail-safe protection, think again: My iPhone got hacked, too.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @John Carbone:

Quote from @John Underwood:

My attorney always holds any escrow money I am putting down.
This minimimizes any scams.

If the seller had their identity stolen like this case though with fake documents and a bank account that he could access, how does having the attorney catch this. Seems like everyone in the transaction could be duped through closing?
Title Insurance.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @John Underwood:

Quote from @John Carbone:

Quote from @John Underwood:

My attorney always holds any escrow money I am putting down.
This minimimizes any scams.

If the seller had their identity stolen like this case though with fake documents and a bank account that he could access, how does having the attorney catch this. Seems like everyone in the transaction could be duped through closing?
Title Insurance.

forgery is covered in Standard and ALTA policies.
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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
If you're working with a realtor, wouldn't they catch on to something fishy. For out of state and inexperienced buyers, this would be the perfect example of why to use realtors.
[email protected]330-557-3021
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
3y
There are guidelines now from many title insurers concerning vacant land sales... including the requirement that title sends out welcome materials via USPS confirming the seller is selling his/her/its land. They also recommend RON (remote online notarization) for settlements as that process includes identity verification (need knowledge of credit accounts, etc.) which is more difficult to pull off than simply passing a fake ID. Todays fakes actually pass bar code scans!
Yes, the key is land is more often free and clear and clearly more susceptible to fraud schemes.
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Collin HaysBusiness Member
OP
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
3y
Quote from @Sarah Kensinger:

If you're working with a realtor, wouldn't they catch on to something fishy. For out of state and inexperienced buyers, this would be the perfect example of why to use realtors.

This is/was listed with a realtor. Got right past them.
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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Quote from @Collin Hays:

Quote from @Sarah Kensinger:

If you're working with a realtor, wouldn't they catch on to something fishy. For out of state and inexperienced buyers, this would be the perfect example of why to use realtors.

This is/was listed with a realtor. Got right past them.
Sorry missed that fact....obviously they weren't a good realtor. To bad!
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Jeff S.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
3y
It’s not just limited to land, @Collin Hays Any transaction that allows the seller to present a notarized deed anonymously is subject to fraud like this. We had a similar issue where the transaction actually went through and nearly cost us over $600k. I wrote about it here: We Loaned on a Stolen House

Similar to your friend’s case, the seller in our transaction was allowed to mail in a grant deed with what we now believe was a fake notarization. No title prelim would have caught that. Nor would working with even a knowledgeable Realtor. Fortunately, title insurance covered our potential loss, and we came out whole.

With the Remote Online Notarization (RON), that most states are now allowing, I’m hoping it gets better. Of course, I was skeptical when the telephone was invented as well as the automobile. And don’t get me started on that Tom Edison.
3 Reply
John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Jeff S.:

It’s not just limited to land, @Collin Hays Any transaction that allows the seller to present a notarized deed anonymously is subject to fraud like this. We had a similar issue where the transaction actually went through and nearly cost us over $600k. I wrote about it here: We Loaned on a Stolen House

Similar to your friend’s case, the seller in our transaction was allowed to mail in a grant deed with what we now believe was a fake notarization. No title prelim would have caught that. Nor would working with even a knowledgeable Realtor. Fortunately, title insurance covered our potential loss, and we came out whole.

With the Remote Online Notarization (RON), that most states are now allowing, I’m hoping it gets better. Of course, I was skeptical when the telephone was invented as well as the automobile. And don’t get me started on that Tom Edison.
I think a lot of people think is like those Nigerian Prince emails. These real estate ones are actually very sophisticated. Based on research after the fact, this has been exploding in popularity.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
That is a crazy thing. We get a ton of mail, email and even phone calls about our properties. I just toss em. But that doesn't mean they can't get me!
0 Reply
Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
If you read the article. The Realtor caught that the seller wasn't real with some phone lookup.
Realtors, Lenders, Title Officers in some states are required to do a "know your customer" training annually. The first clue is never meeting the stranger in person, stranger contacts need closer checking- RON is helpful but also your instincts, snoop on Google search, ask deep questions, check check
The title company pays for the loss if the notary is faked or ID is stolen.
The article says the bad guys free clear lots and cash deals that are below market price- this is important to prick your ears up when that combination is yours.
If you lose your driver's license/passport/SSIcard report it and check your credit every six months.
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Caroline Gerardo:

If you read the article. The Realtor caught that the seller wasn't real with some phone lookup.
Realtors, Lenders, Title Officers in some states are required to do a "know your customer" training annually. The first clue is never meeting the stranger in person, stranger contacts need closer checking- RON is helpful but also your instincts, snoop on Google search, ask deep questions, check check
The title company pays for the loss if the notary is faked or ID is stolen.
The article says the bad guys free clear lots and cash deals that are below market price- this is important to prick your ears up when that combination is yours.
If you lose your driver's license/passport/SSIcard report it and check your credit every six months.

Hypothetically speaking, assume in this scenario a buyer went through with purchase and made it all the way through title company. The fraudster gets the funds for the land, then how does it get resolved, who takes the loss, who keeps the land etc
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Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
Quote from @John Carbone:

Quote from @Jeff S.:

It’s not just limited to land, @Collin Hays Any transaction that allows the seller to present a notarized deed anonymously is subject to fraud like this. We had a similar issue where the transaction actually went through and nearly cost us over $600k. I wrote about it here: We Loaned on a Stolen House

Similar to your friend’s case, the seller in our transaction was allowed to mail in a grant deed with what we now believe was a fake notarization. No title prelim would have caught that. Nor would working with even a knowledgeable Realtor. Fortunately, title insurance covered our potential loss, and we came out whole.

With the Remote Online Notarization (RON), that most states are now allowing, I’m hoping it gets better. Of course, I was skeptical when the telephone was invented as well as the automobile. And don’t get me started on that Tom Edison.
I think a lot of people think is like those Nigerian Prince emails. These real estate ones are actually very sophisticated. Based on research after the fact, this has been exploding in popularity.

The underwriter reviews and interviews everyone. Realtor/escrow or attorney/buyer/bank where the funds went in ... Insurance policy pays the buyer back for the cash loss in thirty days and has to pay seller as well. Buyer does not own the land. Typically the scammer is not doing this to own the land or resell the land. The recording of the transfer deed usually ca be backed out and then the seller still owns the land. Realtor has to return the commission or the title company might sue the broker/real estate company for lack of due diligence or negligence and then the errors and omission insurance will be involved (pays for attorney). Most real estate contracts have arbitration so buyer probably would not win against anyone, they just get original money back. Everything in writing is reviewed- emails, contracts, notary, identification. FINCEN.gov is involved. Local police don't have the guns for this type of crime- considered wire fraud, misrepresentation, grand theft, mail fraud... This is financial terrorism.

A couple ways to spot it:

1. seller came from zillow account with weird email; Realtor only emailed back and forth no phone calls no face to face; the sentences in the email would have been translated and they use ChatGPT to organize phrasing. The emails will look and feel off.

2. Title company requires a statement of information with social security number and current driver's license. They check the signatures against the deed. They pull digital reports on the seller. If the ID was stolen it show up most the time if reported. The T O and the attorney or escrow officer talk with seller and buyer.

3. Seller asks to sell fast and under market value. Anything too good to be true probably is bad.

4. Terrorist will not contact the top Realtors they are looking for someone hungry. Terrorist will not accept a long escrow with a loan as lender might catch them as well.

5. with land there probably is no insurance agent so that makes one less person to catch the terrorist- this is why they find free and clear land

The practice of online notary is becoming more common to save the cost ($200) and speed things up. I do not think RON works yet. Do we think it's worth the risk???

A few places this originates from:
Albania, Barbados, Burkina Faso, Cayman Islands, Democratic Republic of
Congo, Gibraltar, Haiti, Jamaica, Jordan, Mali, Mozambique, Panama, Philippines, Senegal,
South Sudan, Syria, Tanzania, Turkiye, Uganda, United Arab Emirates and Yemen

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Jeffrey McKeePro Member
Real Estate Agent · Plano, TX · Member since 2013 · 479 posts · 91 votes
3y
Quote from @Collin Hays:

A fellow contributor here, John Carbone, sent me a link yesterday to a lot for sale in the Smokies. The price certainly seemed reasonable. It so happened that I know the owner of the lot. He is one of our homeowner clients. I called him last night to ask him if he was selling his lot, and he said "No."

As it turns out, a fraudster posing as the owner listed the land with a local realtor. The fraudster had captured my client's driver's license info, and who knows what else at this time.

Moral of the story: If you are looking at land for sale, or any real property for that matter, make sure it is actually for sale before you start making offers and, more importantly, sending any money.
It's unfortunate to hear about the situation encountered.
This serves as a valuable reminder for everyone to exercise caution when dealing with real estate transactions.

Basic precautions to deter real estate fraud:
1.) Collaborate with trustworthy: Engage reputable real estate agents, lawyers, and appraisers who have a solid track record and are licensed or certified.
2.) Stay vigilant about unusual payment methods: Be cautious when you encounter requests for payments through unconventional or unfamiliar channels.
3.) Be cautious when sharing sensitive data: Protect your personal information, such as social security numbers and financial account details. Only disclose this information to verified and trusted parties.
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Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
3y
This is a form of wire fraud.
In the real estate world there are about 100 forms I have to have every buyer/seller sign. Disclosure, after disclosure.
BUT...when it comes to the wire fraud warning I tell them to actually READ through it. I also re-iterate it throughout our process. When it's time to close I make them read it again, and tell them to follow the instructions on the fraud warning they signed.
A friend of mine had a buyer he was representing get hit with wire fraud on a purchase. Luckily, his errors/omissions insurance actually covered it.
It's a serious crime and it's very much on the rise. Be careful out there!
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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
Quote from @John Carbone:

Quote from @John Underwood:

My attorney always holds any escrow money I am putting down.
This minimimizes any scams.

If the seller had their identity stolen like this case though with fake documents and a bank account that he could access, how does having the attorney catch this. Seems like everyone in the transaction could be duped through closing?
Determined fraudsters can evade detection, having an attorney involved adds an extra layer of protection, increasing the chances of identifying fraudulent activity before it's too late.
[email protected]832-889-5607
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Chris I.
Gilbert, AZ · Member since 2018 · 93 posts · 42 votes
3y
Quote from @Collin Hays:

One more thing: If you think "Two Step Authentication" is a fail-safe protection, think again: My iPhone got hacked, too.

Were you using 2FA via text messages or with an authenticator app? Text message method is easily hacked via social engineering, authenticator app method very difficult.
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Brooklyn McCarty
Investor · Member since 2022 · 1k+ posts · 754 votes
3y
Great example of why to use a seasoned, trusted realtor!
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