“The fraudster’s greatest ability is the certainty that the fraud is too clever to be detected.” – Louis J. Freeh, American Attorney & Former Director of the FBI
Are you lucky enough to own land? If your answer is yes, you need to be aware of recent scams in the news and how to protect yourself from them. Why? Because property fraud crimes (including land fraud) have increased by 6,134% in recent years! Below we discuss definitions, red flags, and the One Simple Step To Protect Yourself From Land/Lot/Parcel Fraud!
What is land/lot/parcel fraud?
According to ShouseLaw.com, ”Real estate fraud is where one person or party commits fraud in connection with the purchase, sale, rental or financing of real estate property. Real estate fraud is a crime under state and federal laws and can result in jail or prison sentences.”
What’s the difference between land, lot, and parcel?
According to experts at Cornell Law School, these are the legal definitions as they pertain to real estate and property holdings:
- Land: Land is real property or real estate. Owning land means the owner owns the space underneath the land, the land itself, and the airspace over it. Depending on the ownership type, the interest of a landowner on the land can be very different. A fee simple owner has the complete right to build, mine, or conduct other activities on the land, as long as the activity does not violate any regulations or other people’s rights.
- Lot: This means a parcel or a single article that is the subject matter of a separate sale or delivery, whether or not it is sufficient to perform the contract.
- Parcel: A parcel is a defined piece of real estate that specifies the location and boundaries of the property. The assessor’s parcel number, or APN, is a number assigned to parcels of real property by the tax assessor of a particular jurisdiction for purposes of identification and record-keeping.
Property Fraud Red Flags
The Utah Department of Commerce and the North Carolina Real Estate Commission have identified a list of red flags when it comes to property fraud:
- the listing involves vacant land (in rare circumstances, vacant condos)
- the vacant land is being listed for well below market value
- the seller is not located nearby, and may claim to be out of the country while traveling on vacation; they claim they cannot meet in person and must do everything by email
- the email address or phone numbers are from another country; of course, some legitimate buyers and sellers live overseas, but this does raise a flag that should be checked
- the seller is in a hurry to close the sale
- the seller has a family emergency, needs a quick cash sale, and will accept substantially less than full price if they can close in a very short time
- the seller does not require a due diligence fee and/or low or no earnest money combined with a quick closing (to obtain quick proceeds before a scam is discovered)
- the seller acts aggressive or aloof; the buyer/seller gets very angry at the licensee as the transaction gets closer to closing and applies pressure on the licensee to make sure the deal goes through
- the seller will only sign documents remotely and will not have someone meet locally
- the buyer/seller makes constant excuses, is not able to perform the terms of the contract, or is not returning paperwork
- the seller sometimes offers an incentive such as commission bonuses or promises other opportunities to buy or sell
- the photo IDs of the seller, such as driver’s licenses or passports, are barely legible
- the seller won’t provide detailed information about the property
- typically they’re not able to provide basic information about HOA dues/memberships/transfer fees or utility charges, water rights/shares
The One Simple Step to Protect Your Property from Land/Lot/Parcel Fraud!
Think it can’t happen to you? Think again. The FBI notes that almost $2 billion in properties were recently stolen in one year alone through title and housing fraud. And if it’s not you, chances are good that property fraud has occurred to someone you know such as an elderly neighbor, a family member, or a friend. Check out some of the latest property fraud news & videos here.
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Even Smart Homeowners Can Be Duped Into Land/Lot/Parcel Fraud!
Don’t think it can happen to you? Here’s a sampling of the latest fraudulent activities aimed at property owners across America.
Scam Alert: People Posing as Property Owners Trying to Sell Vacant Land They Don't Own!
ABC7 News
Jay Korff, WJLA, Washington, D.C.
STAFFORD COUNTY, Va. (7News) — Friday evening we headed down to Stafford County to meet realtor Amy Cherry Taylor, who alerted us troubling trend: people posing as property owners trying to sell vacant land they don’t own.
“This is a new situation that has come to light and so we are all trying to be extra careful to make sure we are protecting everybody as much as possible,” Taylor said.
Taylor, with Avery Hess Realtors, says twice in the last several weeks scam artists tried, unsuccessfully, to dupe them. “In our experience they are reaching out on an online portal asking us to sell a piece of property for them,” Taylor said.
Taylor says red flags include scammers refusing to meet in person or via Zoom, refusing to provide identification, declining to sign documents in person, and preferring to work in cash.
“Certain things were not lining up. There were certain questions I would have expected to have been answered by a true owner of the property,” added Taylor. In fact, the US Secret Service Cybercrimes team issued an advisory, warning of a sharp uptick in reports of real estate fraud involving vacant or lien-free properties. Authorities say the scammers are gleaning their information from public records.
“In one of the experiences we had a property that was requested to be listed on the low side and that was certainly a big red flag and one of the first things that made us question who was trying to sell the property,” Taylor said.
If you’re a buyer, probably the best way to assure yourself that you will not fall for this scam is to go with a trusted title insurance company before finalizing a deal.
If you are the owner of a vacant property, “watch online, make sure you are not seeing your address pop up and that your property is not listed when you are not aware and to make sure you have title insurance so you are protected if something like this does happen,” concluded Taylor.
The good news – the scammers trying to fool Amy Cherry Taylor failed. But as we know, one failure probably won’t slow them down.
Be on the Lookout for Vacant Land Scams in Utah!
Press Release
Utah Business
The Utah Department of Commerce’s Division of Real Estate is urging land buyers and owners to be aware of a recently re-emerged scam related to vacant lots and land parcels. The Division of Real Estate is already aware of at least 10 different instances and suspects others.
The scam typically involves vacant land that is owned outright. A fraudster locates a property through public records, impersonates the owner, and lists the property for sale, usually as a FSBO (For Sale by Owner), for a price well below market value. Many of these false listings appear on third-party property sites like Zillow, but the division has received word that more of them are being listed with brokerages to get the listing on a multiple listing service (MLS).
“These kinds of scams are particularly harmful because they erode trust in the real estate market at a time when we want to encourage continued engagement in the economy,” said Department of Commerce executive director Margaret Busse. “But this scam shouldn’t deter anyone. It means buyers need to be extra careful with this particular type of listing.”
Because there’s often not a home or building on the property, the scammers typically present themselves as out of state. Communication is typically exclusively via email or text and the scammers push for a quick close, including the use of a remote notary and title service. It is not clear whether the notary is involved in the fraud or if the sellers are presenting false identification to represent themselves as the property owners.
“Vacant lot or land parcel listings are an easier target for scammers because often there’s little reason to physically visit the property,” said Division of Real Estate Director Jonathan Stewart. “Without a building or home to walk through, scammers can post photos and more easily pretend to be the seller.” Even if a potential buyer does visit the property, there may be little or no evidence to cause the buyer to suspect that the actual owner is not the person who listed the property for sale.
In addition to buyers, the Division of Real Estate is asking agents to take extra precaution to avoid a land selling scam. If you are contacted about selling vacant land or if you are representing a buyer who is looking at vacant land, please do your due diligence and be certain the sellers actually own the property. Research the name of the seller and check their photo ID; take additional steps to identify ownership of the land; and ask specific questions about the property details.
Those who find deceptive listings should report them to the listing site or the brokerage if there is one listed. Deceptive listings can also be reported to the Division of Real Estate at real estate.tah.gov.
Property Scams Targeting Vacant Lots in South Carolina!
NBC2 News
Raymond Owens, WCBD, North Charleston, SC
The South Carolina Real Estate Commission is offering a warning to the public about a scam that involves fake buyers or sellers of vacant land.
“The most alarming call that I received one day- there was a ‘for sale’ sign on our lot, on our land,” said one woman who did not want to be identified. She said the sign was on her father’s 6.5 acres in Awendaw. “I was kind of caught off guard and I thought, well, I knew, we weren’t selling any property,” she said.
So, the woman called the listing agent who confirmed that she had the land listed with an out-of-area seller. The agent even had a photo of someone who she thought was the seller – but it was not.
“We spoke with the agent. She was extremely pleasant, very helpful, and then we took it a step further to try and get it investigated,” the woman recalled. The South Carolina Real Estate Commission sent out a scam alert saying in part:
“The scam targets unencumbered, vacant lots owned by persons out of state. With this scam, South Carolina real estate licensees may be contacted by a person acting as the seller seeking to have a vacant lot promptly sold for below market value. Licensees approached with requests are advised to verify that the seller matches the person on the land deed to be in compliance with state law.”
If you think you may be a victim of this scam, contact the FBI.
Whether we’re providing educational resources on land/lot/parcel fraud or how to weather natural disasters, DomiDocs® is committed to simplifying home management by offering functional tools designed to help save you both time and money, including streamlined document organization, real-time market value tracking, and more!
For more information related to property fraud, read:
How Thieves Identify Your Home & What to Do About It
