In its December 2022 eBulletin, the Commission published an article warning brokers about an increase in scams involving fake buyers and fake sellers. The Commission is seeing a rapid increase in the fake seller identity theft scams. A scammer will contact a listing broker and pose as the owner of the property. In many cases, they produce a very realistic driver’s license to show the broker. A listing agreement is signed and the property is then marketed.
In many cases, the real owner will find out about the listing and put a stop to it before the deed has gone under contract. However, the scammer may already have received due diligence money or, in some cases, even completed the sale. This can lead to injury to the real owner, buyer, brokers, and closing attorneys. In some cases, the owner will have to go to court to get the matter resolved with the buyer.
Some similarities have arisen through all the cases. The scammer often gets in contact with the listing broker through a lead generating website. Most of the time, the scammer states that they are traveling or are out of state and cannot meet the broker in person. The scammer often indicates they need a quick sale due to health or other family matters and are willing to take a lower offer to get that quick sale. The scammer requests to sign documents through Docusign, Dotloop, or some other digital signature platform. The emails appear to be legitimate and they feature the proper owner’s name in the email. It is rare, but in at least one case, the scammer met the listing agent at the property in person.
The other common element is that the scammers usually target undeveloped land, vacant or abandoned properties, or properties that are in a trust where an owner has recently died. Typically, there is no one around that might question a real estate sign on a property and that is why they are being targeted. In some cases, a neighbor who knew the owner contacted either the owner or the listing broker to alert them to the questionable listing.
There is no area of the state that is seeing a higher concentration than other areas. This is affecting the whole of North Carolina as well as other states. The scammer ID’s are also coming from other places than North Carolina when the actual owner is from another state.
As brokers, be vigilant when dealing with these types of leads. The scammer will often have a ton of information about the real owner and can answer questions regarding what you might find on the deed, tax records, or county government records. Remember that these are publicly available documents. Be careful about sellers who are too busy to meet in person, or seem extra motivated to sell quickly, yet are traveling out of state. We recommend that when you see these red flags, you take steps to independently verify that the purported owner is who they say they are rather than rely on documents or information coming from the purported owner. This could include googling, checking with neighbors, looking up the seller on social media, and/or requiring Zoom, FaceTime, or some other online face-to-face meeting. Check the history of the property and contact the previous listing agent/firm if something seems strange about the purported seller. It is important to take your time and take steps to protect yourself, your business, and any potential buyer when faced with a seller showing red flags.
The Commission continues to gather information about these scams for possible referral to law enforcement agencies. However, online scammers are often located out of this state and country so prosecution becomes even more difficult. Be wary and protect both yourself, your firm, and your community.