While its nothing new that real estate transactions are a target of fraud, particularly cybercrimes, its important for Realtors® to continue to educate themselves and their clients to be aware of any red flags or potential concerns during these transactions.

As NAR continues to report a decline in home sales, new tactics have been created by cybercrime rings.  The latest crime to emerge targets vacant lots or unencumbered properties. 

Public records are searched to find the vacant lots or property that doesn’t have a mortgage, and the owner of these properties is identified.  The scammer poses as the landowner and contacts a real estate agent to sell the property – typically all communications are through email or text and not in person.  They indicate that the property needs to be sold quickly and usually below market value to generate immediate interest in the property and then quickly accepts the offer, preferring a cash sale.  The closing is scheduled, but due to being out of town, a remote notary signing is requested by the scammer and fake identification is provided along with falsified documents.  The closing occurs and proceeds are transferred to the scammer.

With today’s market, the above scenario doesn’t seem too far-fetched, but it is important to be aware to ensure you are not misleading a buyer into this type of transaction.

There are many things you can do to help ensure that the transaction is legitimate, such as independently searching the identity of the seller, even seeking a recent photo; request an in-person or virtual meeting via Zoom at which time you request to see their government issues photo ID; never allow the seller to arrange the notary used for closing; be on alert for a transaction where a seller is accepting an offer price below market value in advance of the buyer paying cash and closing quickly. Lastly, you can always send a letter to the address where the tax bill is being sent via overnight carrier or UPS with signature required.  This will confirm the seller’s connection to the property.

Vacant property fraud can have devastating consequences for unsuspecting individuals. In west Michigan, there have already been over 20 confirmed cases and this number continues to grow statewide. Staying informed, being diligent and implementing preventative procedures can protect your clients from being a victim of these scams.