Real Estate Fraud is on the Rise
Selling a house that someone does not own is a serious and fraudulent scam, often referred to as real estate fraud or property title fraud. In these scams, fraudsters impersonate homeowners, forge documents, or deceive buyers and real estate agents to sell properties they do not legally own. Here are some common forms of this scam:
1. Identity Theft and Title Fraud
- Scammers steal the identity of the actual property owner, often by obtaining personal information such as Social Security numbers, driver’s license numbers, or other forms of identification. They then falsify documents to transfer the property title to themselves or to a fictitious person.
- With fake ownership documents, they attempt to sell the property or take out a mortgage against it. The real owner often remains unaware until the property is sold or foreclosure begins.
2. Fake Listings
- In this variation, the scammer lists a property for sale that they do not own or have any legal connection to, often using photos and details pulled from legitimate real estate websites.
- When interested buyers contact them, the scammer typically asks for a deposit or earnest money upfront to "hold" the property. After receiving the funds, the scammer disappears, leaving the buyer without recourse.
3. Phantom Sales
- A scammer poses as the legitimate owner or agent of a property (usually vacant, abandoned, or in probate), forging documents to make it seem like they have authority to sell it.
- They offer the property for a quick, discounted sale, luring in unsuspecting buyers. Once the buyer has paid, they find out that the scammer never had any right to sell the house, and the sale is invalid.
4. Forged Documents
- A common technique is forging the deed to transfer the property into the scammer’s name, or creating fake liens, releases, or other documents. With fake documents in hand, scammers may then try to sell the house or borrow against it.
How to Protect Yourself:
- Title Insurance: Always purchase title insurance when buying a home. It can protect you from potential title fraud or undisclosed claims against the property.
- Verify Ownership: Always verify the seller's identity by checking public records or with a title company to ensure the seller legally owns the property.
- Be Wary of Quick Sales: If the price seems too good to be true or if the seller is pushing for a quick deal without using escrow or a legitimate real estate agent, it may be a red flag.
- Avoid Untraceable Payments: Scammers often ask for payments via wire transfers or cryptocurrencies. Legitimate real estate transactions typically involve banks, escrow companies, or attorneys.
- Use Reputable Real Estate Agents: Always work with licensed real estate professionals who can help verify that all aspects of the transaction are legitimate.
- Monitor Property Titles: Property owners can monitor their titles through their county’s records or hire services that alert them to any unusual changes or new filings on their property.
Signs of a Scam:
- Unusually low prices or incredibly quick closing timelines.
- Pressure to pay upfront deposits or fees before completing due diligence.
- Suspicious or vague ownership history, with a lack of documentation or inconsistencies in property records.
- A seller who insists on unconventional methods of payment.
If someone becomes a victim of such fraud, they should immediately contact law enforcement, file a report with the Federal Trade Commission (FTC), and consult an attorney for advice on recovering losses or restoring the property's title.
Residents of GA – you can set up notifications to alert you of potential Real Estate Fraud by visiting https://fans.gsccca.org/
