Real estate fraud is a growing problem. In high-end markets like Park City, criminals are finding new ways to scam buyers, sellers, and property owners. These scams can cost victims hundreds of thousands of dollars — or even more. My success as a real estate agent means that I am easy for potential clients to find. Unfortunately, in the last couple of years, this has made me a target for scammers, resulting in wasted precious time that could be used to service real clients.
Types of Real Estate Fraud
Even if you own property that you are not planning to sell, it’s crucial to be aware of the different types of real estate fraud and how to protect yourself. Below are some of the most common scams that I have encountered.
1. Fake Seller Scam
In this type of fraud, scammers pose as property owners and attempt to sell land or homes they don’t actually own. They target vacant lots, second homes, or rental properties — especially those owned by out-of-state individuals. As you can imagine, there are a lot of this type of property in Park City, which means our agents are frequently targeted. There have been reports of agents with signed listing agreements from fake sellers or owners seeing a property they owned listed for sale on Zillow by a fake seller.
How It Works
- The scammer impersonates the property owner and contacts a real estate agent to list the home or land for sale.
- They forge ownership documents and use fake IDs.
- They push for a quick, all-cash sale, often pricing the property below market value to attract eager buyers.
- Once the sale closes, they disappear with the proceeds before the fraud is detected.
Personal Example
I was contacted by a person who told me he wanted me to list his vacant lot on Sun Ridge Drive. I know that there are two streets with that name in Park City. One is in Pinebrook, and the other is in Deer Valley. I asked Mr. Fake Seller about the neighborhood where his lot was located. He was stumped, and I hung up.
How I Vet Sellers Who Contact Me
- If the person wants me to contact him through WhatsApp, that’s a red flag.
- I will always run the phone number through “Forewarn,” a safety app available to REALTORS. If the phone number doesn’t match the caller’s name, that’s a red flag.
- I always speak with the seller and ask questions to determine their knowledge of the property, Park City, and its neighborhoods.
- If the seller continues to check out, the next step would be a video call, like Zoom.
- If the seller is signing remotely, I request they do so at a title company instead of using a mobile notary.
- If the seller wants to sell the property for a price that’s below market value, it’s a red flag.
Another Personal Example
I was contacted by a woman in Oregon who told me she was the executor of her father’s estate and inherited vacant land in Park City. I told her to go to First American Title in her city to have her trust documents reviewed. I spoke with the title officer there, and she confirmed the client’s identity. Then I asked to speak with the lawyer who was administering the estate. I looked up the attorney online and contacted him using the law firm’s main number. He checked out. We successfully sold the lot. Because fraud is so prevalent, agents may make remote clients jump through extra hoops to ensure they are legitimate.
2. Fake Buyer Scam
Fraudsters also pose as buyers to manipulate real estate transactions for financial gain. I was recently contacted by a guy who said his name was “Larry Ellison.” It turned out that Mr. Ellison contacted several agents in our market, as reported to the Park City Board of Realtors. Yesterday, I was contacted by a fake buyer who claimed he was from Greenwich, CT. I reported it to our Board, and it turns out other agents also reported him.
How It Works
- A fake buyer makes an attractive cash offer on a property.
- They provide fraudulent proof of funds, sometimes using altered bank statements.
- They request sensitive information about the seller or agent, such as banking details.
- They provide a fake check for their earnest money deposit, back out of the transaction, and request a refund from the brokerage. This is the reason the brokerage I work with only accepts wire transfers for earnest money deposits.
Real-Life Example
I don’t have any personal examples, as I have been able to identify fraudsters over the phone before I waste time showing the property. It was reported that a Park City agent received an offer from an overseas “buyer” who claimed they were purchasing a vacation home in cash. They asked for bank details to wire the earnest money, but the agent became suspicious when the supposed proof of funds was from a doctored online bank statement.
It was recently reported to our Board of Realtors that a fake buyer contacted a seller directly. This is scary because most individuals are not as experienced as REALTORS in screening for fraud. In this instance, the seller became suspicious as his home was already pending sale.
3. Wire Fraud
One of the most devastating real estate scams involves wire fraud, where criminals trick buyers or title officers into sending funds to a fraudulent account.
How It Works
- Scammers hack into the email accounts of real estate agents, title companies, or attorneys.
- They send fake emails that look legitimate, directing buyers or title officers to wire money to a fraudulent account.
- Once the wire transfer is sent, the money is almost impossible to recover.
Personal Example
I represented a buyer in a transaction. The sharp title officer received an email, allegedly from the seller, asking for their proceeds to be sent to an account different than previously provided. The title officer contacted the sellers and everyone realized this was a scammer attempting to snatch my buyer’s funds from the seller. Luckily, the crisis was averted.
This is the reason why we always ask buyers to verify wire instructions directly with our brokerage or the title company. Always be suspicious of changes to wire instructions. Many of our title companies and lenders now use secure channels to communicate sensitive information.
Final Thoughts on Real Estate Scams
Real estate fraud is a serious risk, but knowledge is your best defense. If you own property or are purchasing or selling a property, make sure your agent is well-versed in fraud, and trust your instincts if something feels off. In addition, register your email address with the county where your property is located to receive an email if there is a change in ownership. Owners of vacant land or second homes that do not have mortgages are at higher risk of being targeted.