Tech Corner

Technology has created new opportunities for fraudsters to impersonate property owners and intercept real estate transaction funds. Across the country, brokers are encountering increasingly sophisticated identity theft schemes targeting vacant land, rental properties, and out-of-state owners. In many cases, communication appears legitimate, and the documents look authentic.

A common scenario begins when a broker receives an email from someone claiming to be the property owner and wanting to sell quickly. The fake seller often indicates they are currently overseas, traveling for work, or otherwise unable to meet in person. They may also insist on communicating only by email or text and request that the property be listed quickly and priced aggressively to encourage a quick sale.

In the article, Preventing Seller Impersonation Fraud in Residential and Commercial Transactions, the Commission provided steps brokers can implement to verify a remote seller’s identity. The steps are as follows:

• require a government-issued photo ID;
• require a live, face-to-face, video chat with the seller using your own conferencing software, not theirs;
• visit the property in person and confirm the seller knows property details;
• cross-check the seller’s identity using tools like FOREWARN;
• independently locate and contact the owner and talk to neighbors;
• ask for ownership documents that only the true owner will have;
• be wary of quick cash sale;
• research recent sales and withdrawals of the same property;
• educate and protect all parties; and
• coordinate early with the closing attorney.   

Technology will continue to evolve, and so will the methods used by scammers attempting to exploit it. The fake seller scam is becoming more sophisticated and increasingly targets both residential and commercial transactions. Therefore, brokers who combine good technology practices with careful identity verification can significantly reduce the risk of becoming involved in a fraudulent transaction.