You receive a call or an email from a person who claims to have a parcel of vacant land to sell. The person is ready to list with you even though you’ve never met. But there’s just one catch: the seller cannot meet you in person because the seller claims to live out of state or in another country or is traveling. How do you know if this seller is the true owner of the property or a scammer?
This year, several real estate licensees have faced this situation: a scammer or scammers posed as an owner of vacant land in Rhode Island, and even created an email address using the true owner’s name.
In one case, the listing broker said that the “seller” electronically signed a listing contract, disclosures, and then a purchase and sales agreement with a cash buyer. The property was reported to a Multiple Listing Service. The property was scheduled to close once the “seller” sent notarized documents by Federal Express to the closing attorney. All seemed to be going smoothly until the listing broker received a call from the true owner who demanded to know who authorized anyone to sell their property. The seller who signed the listing contract was a scammer.
In another case, a broker contacted a “seller” who listed vacant land on Zillow FSBO that met the needs of the broker’s client. The “seller” gave vague non-answers about the property and did not seem familiar with the area even though he claimed to live in a neighboring town. He called and texted from a phone number in California. After reading the warning about vacant land scams and determining that the land was priced at least 70% below fair market value, the broker became suspicious. The broker and buyer client decided not to proceed with signing a purchase and sales agreement.
In a recent case, a REALTOR® received a call from a man who said he wanted to sell his land in Rhode Island, while impersonating the true owner, with a false license from another state. Thankfully she verified his information thoroughly and stopped the scam before it caused problems.
And, several REALTORS® reported that they received an unsolicited email from someone who claimed to have moved to South Africa quickly and wanted the broker to list a vacant parcel of land in Westerly. Buyers could have lost hundreds of thousands of dollars if a closing had taken place, and the true owner would have needed to have the fraudulent transfer set aside. The listing brokers have lost time, money, and possibly their reputation.
You can never be too careful. How can REALTORS® protect themselves and consumers from a scam?
- Check the municipal assessment records online to find the name and address of the owner of the record of the land. In one case, the listing broker checked the address but the “seller” claimed to have recently moved to California and said that he was in the process of updating his driver’s license. In the other, the “seller” called from a Canadian phone number and claimed to be traveling in Canada.
- If the property is owned by an LLC or corporation, check the Secretary of State corporate records online to find the name and address of the manager; registered agent, and/or officers.
- Ask the “seller” to send you a copy of a government ID that matches the address on record.
- Schedule a time to speak on the phone and/or Facetime or other form of video conferencing.
- Ask for a copy of the “seller’s” driver’s license or passport.
- Ask to see a copy of a tax bill, statement, or other document with the seller’s address.
- Ask the person questions about the property that are not mentioned public.
- Ask the person to respond by email. It may be possible for law enforcement to find the person’s location. In one case, the scammer created an email address with the first and last name and middle initial of the true owner.
- Conduct a reverse directory search of the seller’s phone number. In one case, the listing broker learned from law enforcement that the scammer had used a burner phone but spoofed the phone number of a real person with a different name. The cost of a search can range from cents to a couple of dollars.
- Check social media for photos or information about the seller and compare it to the person who claims to be the seller.
- Rhode Island is a small state. If the property owner has an in-state address on file, consider knocking on the door or researching the phone number of the person who is listed as the owner.
- Use a trusted closing attorney. In one case, the broker asked the “seller” if he had a local attorney whom he wanted to use. He asked the listing broker to recommend one.
- If the seller sends closing documents by Federal Express or another delivery service, handle it carefully. According to law enforcement, the package can be dusted for fingerprints.
- When you send mailings to a neighborhood or former clients and customers, consider encouraging them to create a Google alert with the address of the property. If it is marketed or mentioned publicly, the owner will receive an alert. You can also do this with your own listings to help avoid other types of scams.
If you believe that a scam is occurring, withdraw the listing from any sites, including Multiple Listing Services on which it is posted and report it to:
- the police department in the town or city in which the property is located.
- the State Police
- the FBI. Internet Crime Complaint Center(IC3) | File a Complaint
- the Rhode Island Attorney General’s Office
- any site on which the property is marketed
To avoid this and other scams, trust your instincts. If it sounds too good to be true, it probably is. For more information, contact the RIAR Legal Department at 401-432-6945 or email [email protected].