ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Amidst a Surge in Home Sale Scams; Here's how Estate Agents and Buyers can Stay Safe

A real estate agent received a call from an individual offering to sell a vacant lot at $75k below market value but it turned out to be a fraudulent offer.
PUBLISHED DEC 8, 2023
Home Sale Scams Amidst Housing Inventory Shortage Pexels | by Pixabay
Home Sale Scams Amidst Housing Inventory Shortage Pexels | by Pixabay

The real estate market, already grappling with historic inventory lows, is facing a new and concerning threat as home sale scams continue to escalate across the United States. In a recent incident reported by Patty Zuzek, a seasoned broker, a colleague fell victim to a fraudulent land sale scheme that highlights the emerging trend of scammers attempting to sell properties they don't actually own.

Pexels | by Pixabay
Escalation of home sale scams | Pexels | by Pixabay

In November 2023, a real estate agent in Zuzek's office received a call from an individual who had discovered the agency through a Facebook post. The caller expressed a desire to sell a vacant lot at a staggering $75,000 below market value but insisted on a cash transaction for a swift deal. Eager to seize what seemed like a golden opportunity, a builder was quickly brought on board as a buyer. However, the situation took a sharp turn when the actual property owner confronted the builder two days later, asserting that the land was not for sale.

This incident is part of a broader trend identified by law enforcement agencies and real estate professionals across the country. The Federal Bureau of Investigation (FBI) received a staggering 11,727 real estate-related complaints in 2022, amounting to losses exceeding $396 million, which is an 86% increase compared to 2020. The U.S. Secret Service, in collaboration with CertifID Inc., issued a warning earlier this year about the surge in real estate fraud associated with vacant and unencumbered properties.

Deployment of seller impersonation as a tactic has seen a significant uptick with 77% of real estate professionals surveyed reporting an increase in such incidents over the last six months. The scammers exploit publicly available records to impersonate property owners, capitalizing on the desperation of real estate agents seeking potential deals in the current housing landscape. Real estate agents, facing a drastic reduction in the number of homes available for sale, are particularly vulnerable.

Pexels | by Tima Miroshnichenko
Insights from Industry Professionals Pexels | by Tima Miroshnichenko

What makes these scams more insidious is the minimal paperwork required by fraudulent sellers to initiate transactions. Using fake IDs and conducting transactions via phone and email, scammers go to great lengths to make their impersonation convincing. With a focus on vacant parcels and unoccupied properties that are lien-free, these fraudsters are targeting a specific niche that is more challenging to monitor.

For buyers ensnared in these scams, the aftermath involves a painstaking process of regaining lost funds through a title insurance claim. The National Association of Realtors acknowledges that this can be an aggravating and time-consuming ordeal. CertifID, however, has emerged as a crucial ally in the fight against real estate fraud. The organization has assisted 378 customers who fell victim to this type of scam with 60% representing buyers. Zuzek recounted a specific case where, once the police were involved, the real estate firm stepped back, allowing law enforcement to take the lead. The builder, who has already paid for the property, is expected to recover the funds once the original owner files a complaint with authorities.

Pexels | Liza Summer
Pexels | Liza Summer

The pervasiveness of these scams is a cause for concern within the real estate community. As the real estate industry grapples with these evolving threats, it becomes imperative for stakeholders to remain vigilant. Homebuyers, real estate agents, and law enforcement must collaborate to implement effective measures to identify and combat this emerging menace in the housing market.

With scammers becoming increasingly sophisticated, it is crucial for all stakeholders to stay informed, implement stringent verification processes, and leverage technology solutions like CertifID to fortify the defenses against fraudulent activities.

MORE ON MARKET REALIST
The celebration was justified as Joseph won a brand new car on his birthday.
13 hours ago
The player, Shaunica Amantine missed out on taking home over $82,000 over the seemingly tough puzzle
15 hours ago
After nearly losing a brand new car, Dylan got a second chance to take it home.
16 hours ago
The seller Robert, chose to keep to his one-of-a-kind Boba Fett prototype, expecting to get more.
1 day ago
The player, Cherie Noisette, missed on out taking home more than $61,000 in prizes.
1 day ago
The seller refused to accept a lowball bid for his signed, rookie Mickey Mantle card.
1 day ago
Harvey couldn't relate more with the contestant and demanded the response to be number 1.
1 day ago
The player also brought her husband along on the stage to support her.
2 days ago
The guest who had very little idea about the Sun Valley poster was beyond delighted.
2 days ago
The FSIS announced at least five people were injured from consumption of the affected products.
3 days ago
In the end, the guest was ready to fight her sister for an item worth thousands of dollars.
3 days ago
Fans were heartbroken to see the player, Ryan, walk away empty handed.
3 days ago
Harvey couldn't believe the hard researched facts about catfish on the show.
3 days ago
Carey demanded the Wikipedia page of "Stack the Deck" game to be updated after the win.
3 days ago
The player Titus Stevens missed out on taking home nearly $65,000 over an easy puzzle.
4 days ago
Harvey couldn't control himself after hearing some of the answers.
4 days ago
The thrift store find turned out to be quite profitable for the seller named Kimberly.
5 days ago
The creator showed proof that the store jacked up the price of an item by $3 during a sale.
6 days ago
The contestant, Linda Rivera failed to crack a seemingly easy phrase in the finale.
6 days ago