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Real Estate Agents, Beware the Vacant Land Scam

A property owner in El Sereno, California, couldn’t believe it when he saw his vacant lot for sale on a popular real estate website. The lot was in escrow, and the sale was days away from closing for $280,000. But he wasn’t selling. A scammer impersonating him was, to the surprise of the buyers and the listing real estate agent. The scam fell apart when a suspicious neighbor called the actual property owner, asking him if he was sending people out to measure his property lines.

This vacant land scam isn’t new, but using real estate agents is.

Once reserved for for-sale-by-owner swindles, the latest iteration of this land scam involves criminals contacting legitimate (and unsuspecting) real estate agents to list the property for them. According to the FBI, real estate and rental scams continue to rise, with more than $396 million lost in 2022.

How the real estate scam works

Fraudsters search public records for land parcels that don’t have liens or mortgages, which makes it easier to take action on the property. If an owner isn’t around and they don’t have a lender to answer to, they’re probably not going to know someone’s taking over their title.

Criminals post the property for sale to lure unsuspecting buyers. They may also involve an innocent listing agent to help sell the property and lend credibility to their scam. New agents looking to build their business are favorite targets.

The scammers might forge ownership documents by manipulating details from public records. In some cases, they impersonate the genuine owner.

They offer an attractive bargain compared to market prices, which creates an urgency to seal the deal. This urgency allows them to insist on immediate payments or deposits using a method difficult to trace or recover, like wire transfers.

When the buyer and agent realize they’ve been deceived, their money and reputation disappear along with the criminals. The would-be buyer is left with significant financial losses and no legal property ownership. The real estate agent is left holding the keys to a scam they unwittingly participated in.

Red flags for real estate agents

Stay alert for these red flags if a “seller” approaches you with a request to sell their vacant land:

  • They’re selling for less than fair market value.
  • They don’t want a “for sale” sign in the yard.
  • They’re looking for a fast sale, giving preference to cash offers.
  • They have a hardship story explaining the need for a quick sale, often involving them relocating to another country.
  • They’ll only accept wire transfers.
  • They’ll only communicate with you electronically.
  • They require a remote closing.
  • They insist on arranging for their own notary, who is also remote.
  • They do not know details about the vacant property beyond what’s in the public record.

How to avoid a land scam

You can protect yourself, your clients and unsuspecting landowners by following this advice from the National Association of Realtors:

  • Conduct due diligence to verify the seller owns the property and they are indeed selling.
  • Ask for multiple forms of identification, including proof of ownership.
  • Double-check the authenticity of all documents.
  • Request a face-to-face meeting.
  • Test their knowledge of the property using information that can’t be found online. For example, talk to neighbors or visit the property.
  • Have the title company arrange for a notary.
  • Ask the seller to provide a copy of a voided check with a disbursement authorization form before transferring any funds.
  • Use a wire verification service to confirm the account information and ownership.

Report suspicious activity

Remember, if a prospect listing seems too good to be true, it probably is. Always perform due diligence. Your clients and the landowners will thank you.

Report suspected scams to the Internet Crime Complaint Center. Your reports keep authorities in the loop on criminal operations and help prevent future scams.