At Old Republic Title, we take protecting property rights seriously and understand the importance of providing information that prevents bad actors from succeeding. Read on to learn how seller impersonation fraud (SIF) works, red flags to watch for, and precautions you can take to avoid falling victim and protect your commercial or residential property.
How the Scam Works
In past years, a seller impersonation fraudster would search public records to identify property that is free and clear of a mortgage loan or other liens, often targeting vacant land and rental properties owned by foreigners or the elderly. The fraudster would then pose as the property owner and use an internet request, email or text message to hire a real estate agent.
When it comes to scheduling a signing appointment, the fraudster offers an excuse for not being able to sign documents in-person and requests to use a mobile notary. Then, impersonating the notary as well (or with the help of a co-conspirator), the fraudster delivers falsified documents to the title company or closing attorney. Once the transaction closes, the buyer’s funds are unknowingly wired to the fraudster’s bank account. The discrepancy in ownership is often not discovered until documents are recorded with the county clerk’s office, or months or years after the transaction has closed.
These days, fraudsters have gotten more sophisticated, and will now use a property owner's Social Security and/or driver's license numbers in a transaction, as well as legitimate but fraudulent notary credentials. Fraudsters use email, text messages, phone number spoofing, and even deepfake voice technology to mask themselves and commit crimes from anywhere. And, due to the types of property being targeted, it can take months or years for the actual property owner to discover the fraud.
Property Red Flags
Here are some potential red flags to look out for in a property to avoid SIF:
- Property is vacant or non-owner occupied, such as investment property, vacation property, or rental property.
- Has a different address than the owner's address or tax mailing address.
- Has no outstanding mortgage or liens.
- Is for sale or sold below market value.
Seller Red Flags
Here are some potential red flags from a seller:
- The seller wants a quick sale, generally in less than three weeks, and may not negotiate fees.
- Wants a cash buyer.
- Is refusing to attend the signing and claims to be out of the state or country.
- Is difficult to reach via phone and only wants to communicate by text or email, or refuses to meet via video call.
- Demands proceeds to be wired.
- Refuses or is unable to complete identity verification.
- Wants to use their own notary.
Precautions to Take
To help combat the risk of becoming a victim to seller impersonation fraud, consider taking the following precautions throughout the real estate transaction.
- Ask the real estate agent if they have met the seller in person or have otherwise verified the identity of the seller or used a third-party vendor to verify their identity.
- Ask questions to learn the seller’s knowledge of the property that is not readily available in public records.
- Mail a letter to the owner of the property at the address listed on tax records.
- Contact the owner at an independently discovered and validated phone number.
- Require notarization from a vetted and approved notary. If remote online notarization is not available in the state where the property is located, the title company or closing attorney should arrange the notary appointment.
- Compare the seller’s signature to the signature of the owner shown on other recorded documents.
- Follow your instincts, as they are generally the number one indicator of suspicious activity.
You can also download our Seller Impersonation Fraud flyer and share it with others to help spread awareness of this growing threat.
Protecting Your Title Rights
Property owners may be able to establish additional protections against seller impersonation fraud by signing up for free property monitoring services if this service is offered by their local county recorder’s office. The service notifies property owners when documents have been recorded against their property and may include fraud notifications.
Homebuyers can safeguard their title to property by purchasing an ALTA Homeowner’s Policy of Title Insurance that includes protection against title defects caused by forgery or impersonation after the Date of Policy. For more information about fraud prevention and protecting the title to your property with title insurance, visit Old Republic Title’s Educational Materials webpage or contact your local Old Republic Title representative.
If you suspect that you are a victim of seller impersonation fraud, it is vital to act fast! File a fraud report with local and state law enforcement, the Federal Trade Commission at www.ftc.gov and the Federal Bureau of Investigation (FBI)’s Internet Crime Complaint Center at www.ic3.gov.
