The business of buying and selling real estate is challenging. Real estate professionals have been guarding their clients against wire fraud for the past several years. Now, fraudsters have discovered a new way to rip off consumers. They impersonate an owner, list a property for sale, “sell” the property, and then pocket the proceeds. Meanwhile, the buyer who just wired funds for the property finds out that he/she really didn’t buy anything as the sale was not legitimate.
There has been one such successful sale like this in Park City. Savvy Park City real estate agents thwarted two additional attempts.
The recent and attempted frauds were all on vacant land listings. It’s easier to pretend you own a land parcel as this sidesteps the issue of trying to “show” a property that you don’t really own. The fake owner signs a listing agreement with a brokerage or posts the listing as a “For Sale by Owner” on Zillow. Since many sellers in resort communities live elsewhere, it is not unusual for a listing agent to meet a client over the phone and handle the paperwork electronically.
The fraudster then uses a fake ID to notarize the deed, and provides the title company with wire instructions for the proceeds. The proceeds disappear quickly from a US bank to an international account. The recent Park City cases have been reported to the FBI.
A few practices to help mitigate fraud:
- If you own vacant land, holding title in an LLC or trust provides an extra layer of protection, as the fraudster would then need to create phony LLC or trust documents.
- Work with a trusted title company that will vet the seller and insure the title for the transaction.
- If you see a listing for vacant land that seems underpriced, be suspicious.
This type of fraud has been reported in resort markets other than Park City, too. The fraudsters typically list vacant land, but we know of one such incident that involved a condominium. This is yet another reason to work with a trusted professional for your real estate transactions.