3 Examples of Real Estate Fraud
It is time to peek at personal real estate fraud stories. Please note we are not referring to the 145 million dollars that was lost in 2023 to wire transfer fraud! When we think about real estate fraud, we often think about the buyers wiring closing funds to a different closing address, only to learn later that the money had been stolen—the transaction highjacked—and both buyers and sellers were swindled. Measures are now in place in the real estate world to be very certain that the bank routing numbers are correct, the principles of a real estate transaction are speaking to each other, and we all work with only the legitimate bank and title company. We realtors must closely monitor our transactions!
My personal issues with fraudulent people in my real estate world are escalating. Practicing due diligence is becoming more difficult as fraudsters are becoming bolder and more clever!
This is why I’m sharing 3 very true stories about real estate fraud this month:
1) Leasing Fraud
My personal frustrations with real estate fraud began a few years ago, when I was an active residential property manager. For those of you who know me, I rented and managed 40 homes for owners.
I will never forget the home I was renting for a seller who was also a good friend. When I arrived at the house with the new tenant and the signed lease, my key would not work in the door lock. I found out that there was a new family fraudulently living in the house. They had replied to an advertisement on a website and had handed over the deposit and the first month’s rent to a swindler. The unsuspecting tenant accused me of being unethical and a crook. When the police arrived, we resolved the issue: my legitimate tenant took possession of the home and the swindled tenant was out of a home and $5000.
I have not been actively involved in property management since 2017, but the website is still running advertisements for rental homes. Tenants beware! As we all advertise on social media, one can see how this may happen! If you want more details on red flags in renting real estate, please contact me.
2) Vacant Lot Fraud
If you own a vacant lot, beware! I have never had to regularly count on sheriffs in my local counties in my circle of contacts, but for the last three years, that has changed. Thank you, Sheriffs! I really like that I do not work for a large real estate company, but I am convinced that realtors who own individual “boutique” real estate companies are prime targets. This is how the scenario plays:
I am contacted by a seller who asks me to quickly list their vacant lot for a myriad of reasons. I’m also told the following:
- It’s not possible for the seller to meet in person because the seller is traveling or not available
- The seller can only be contacted through a specific phone service
- The seller requests that I not communicate with any other local realtors, since the seller’s experiences with the other realtors is terrible, and they don’t want the other realtor to find out that I am listing their lot. (Really?)
It is incredible that when I ask for identification, the seller sends a photo id of someone who has similar names and similar addresses, but something is off. Perhaps a middle initial, etc. Fake driver licenses! Nonexistent people! Nonexistent telephone numbers! My first instinct is to contact the owner on record, but often it’s difficult. Therefore, I contact my new friend, the Sheriff!
Over the last two years, this scenario has happened multiple times regarding lots in my county. And recently I received an email of high importance from my Florida Multiple Listing Service, telling Florida realtors to be wary of the same scenario happening in Florida. Would I be justified in thinking this issue is national? So, lot owners, be aware!
3) Referring Leads from Outside Area Realtors
I’m a member of the Women’s Council of Realtors (WCR), a national association that has helped my clients move out of state and find a new home. These are wonderful people with excellent results! But recently a realtor contacted me from a real estate company on the east coast who told me they have a client needing assistance in the Denver area. The email stated, “Just click here!” Upon checking, there was no such individual, but the real estate company was legitimate. I even reviewed a realtor profile sheet. Unfortunately, I found these issues:
- The realtor did not exist
- The real estate company’s telephone number was fake
- The email address was fake
- I attempted to follow up with the real estate company but was told this misrepresentation against the company had been occurring over the last few years.
Okay, fraudsters, I will continue to be diligent to protect the interests of my clients and to ensure that Link performs only work that support our Realtor Code of Ethics. Rest assured, I am always looking out for you! Thank you for reading.