Earlier this week, the kind people from Hull Barrett in Evans stopped by our office and gave us an earful about the most recent closing dilemma to be on the lookout for in seller fraud.
Seller fraud is not a new thing. Typically, it looks like a seller who intentionally covers up defects at a home or where they attempt to sell a home with money owed to contractors before they are publicly recorded.
This new type of fraud is something I’ve decided to call a phantom seller. These malicious fraudsters are mostly selling vacant land or abandoned properties and go to great lengths, creating convincing seller credentials to mislead a buyer or even a realtor into believing they own land and can legally sell it.
They are more likely to be advertised as “for sale by owner” and look extremely legitimate. Once you express interest, they engage in negotiations, often push for a quick cash sale, and request a substantial deposit or down payment. They will even use a local closing attorney to sell the land and have picture IDs made to facilitate the sale.
You could literally purchase a piece of land that exists and not really own it because the person who signs to sell it to you has impersonated the owner, and no one even knew until it was too late. WHAT a nightmare that would be for the buyer of the land and the owner who didn’t actually sell it. This is becoming so prevalent, the costs of title insurance are increasing, but the cost of NOT purchasing title insurance could break the bank!
So, what can you do to protect yourself and not fall prey to these venomous predators?
Here are some proactive steps you can take to safeguard your investment.
Verification is key: First, do your best to verify the identity and credentials of the seller or their agent. Seek professional guidance and verify their licenses. A simple Google search could give you all the information you need.
Visit the property: Whenever possible, physically visit the property and meet the seller in person. This provides an opportunity to confirm their identity and assess the property’s condition. Phantom sellers, generally, are never in the same town as the property and will not be available to meet in person.
Secure legal counsel: Employ the services of a qualified real estate attorney to review all documents and contracts for authenticity. Make sure you are forthcoming and provide answers to all their questions. Remember that they are trying to help protect your interest. NEVER buy a property without using a local and reputable real estate attorney!
Title Insurance: ALWAYS consider purchasing title insurance, which offers protection in case of identity theft or title disputes. I know insurance seems like a waste of money in most cases, but this is one that you should definitely buy!
Trust your gut: If any aspect of the transaction feels suspicious or rushed, trust your instincts and proceed with caution.
As the real estate market evolves in the digital age, so do the tactics of those who seek to exploit it. Be diligent and stay aware of the real dangers and risks. With awareness and knowledge, you can shield yourself from becoming a victim.
Take some precautionary action! It is so important that you have a local realtor that you can trust and lean on, and all the good ones are happy to lead and guide you along the way.