Real estate scams are becoming increasingly sophisticated, particularly those targeting paid-off properties. These scams often involve fraudsters impersonating rightful owners, attempting to sell properties they don’t own, or coercing vulnerable homeowners into transferring their deeds. As real estate professionals, it’s crucial that we remain vigilant and educate our clients about these risks.
Recent Scams in the Industry
One alarming scam involves fraudsters posing as property owners and attempting to sell homes or land they have no legal claim to. For example, a recent case shared online detailed how a scammer impersonated a landowner, listed the property well below market value, and nearly closed a fraudulent sale before the real owner intervened. The scammers had fabricated documents, used fake IDs, and even pressured a quick closing to avoid deeper scrutiny.
Another scam that continues to target homeowners is the equity stripping scheme. In these cases, con artists manipulate homeowners—often elderly individuals or those in financial distress—into transferring their property under false pretenses. They promise financial relief or legal assistance, only to drain the property of its equity and leave the homeowner with nothing. Some cases have involved scammers offering to “save” homeowners from foreclosure, only to have them unknowingly sign over their property rights.
Key Warning Signs to Watch For
To help prevent fraudulent transactions, here are critical red flags that agents should be
aware of:
- Unsolicited Offers & Urgency Tactics
If a seller is aggressively pushing for a quick cash sale without allowing time for verification, it’s a major red flag. Scammers often try to rush transactions before anyone has time to investigate. - Inconsistent or Suspicious Documentation
Pay close attention to property records, title documents, and any power of attorney paperwork. If there are inconsistencies—such as multiple names appearing or missing information—dig deeper before proceeding. - Difficulty Verifying Seller Identity
When representing a seller, always request multiple forms of identification and verify ownership through official records. If the seller refuses or hesitates, it’s worth investigating further. - Remote or Unavailable Sellers
Many fraudulent sellers claim to be out of the country or unable to meet in person, insisting on handling everything digitally. This can be a sign of an impersonation scam. - Requests for Unusual Payment Methods
Be cautious if a seller insists on wire transfers or payment methods that make it difficult to track the recipient. Secure transactions should always go through trusted escrow services.
How to Protect Your Clients
- Verify Ownership Early – Always cross-check seller information with county records before listing a property or proceeding with a sale.
- Educate Homeowners – Advise clients to monitor their property records, especially if they own paid-off homes that could be targeted.
- Secure Financial Transactions – Use only verified escrow and title companies to handle funds and ensure all paperwork is legitimate.
- Report Suspicious Activity – If you suspect fraud, report it to local authorities, title companies, and the real estate commission to prevent others from falling victim.
Oakwood Escrow is committed to helping ensure secure, fraud-free transactions. If you ever have concerns about a transaction, our team is here to help with verification and due diligence.
Let’s work together to protect our industry and our clients from these ever-evolving scams. If you have any questions or need assistance, don’t hesitate to reach out.