Be on the Lookout for Fake Sellers
Scam alert: The pandemic led to an increase in online transactions, giving scammers a new window of opportunity: They’re contacting members as sellers who want to list their “home” – but it’s for a property they don’t actually own.
We’ve heard an unwelcome trend on Florida Realtors® Legal Hotline lately: people fraudulently posing as property owners. They enter into listing agreements with our members and contracts with unsuspecting buyers.
Fraud has long been an issue surrounding the sale of real property. The Statute of Frauds, which requires a contract for purchase and sale of real property be in writing and signed to be enforceable, originated in England in 1677. Florida has its own history with fraud, as people such as Charles Ponzi (whose last name is the origin of the phrase “Ponzi scheme”) sold swampland in Florida to unsuspecting purchasers in the 1920s.
Within the last few months, members have been reporting a new trend to Florida Realtors Legal Department: People sending electronic communications to brokerage firms, trying to convince them to enter into a listing agreement to sell property they don’t own.
We’re currently sifting through diverse stories to see if any trends make these fake sellers easier to spot. Please keep an eye out for any red flags so you can avoid becoming a victim of these fraudsters.
The first story we heard was reported in the newspapers, so it’s the most detailed report we have. A residential homeowner in Central Florida was staying at his family’s second home, which is located outside Florida. Some caretakers of his Central Florida home called to alert him that his locks had been changed, and that a lockbox had been placed on the front gate.
The homeowner was alarmed by this news, so he checked security footage, which showed people he didn’t know walking through his house. He quickly flew home and filed a police report. Two days later, he learned the rest of the story when a real estate licensee and photographer showed up to take listing photos. The stranger he noticed in his home on the security camera was the real estate licensee.
Someone posing as the owner had been communicating with the licensee through email and WhatsApp, and instructed the licensee to change the locks, claiming to have lost the keys. Thankfully, the owner’s intervention ensured the fraudulent listing didn’t progress beyond this point.
The rest of our reports are more second or thirdhand snippets of stories, but I’ve catalogued as many different pieces as I can, so you can be on the lookout for similar stories. Feel free to reach out to our Florida Realtors Legal Hotline with any additional examples you encounter. The more we know about these fraudsters, the better we can help our membership understand this issue and avoid becoming victims themselves.
A few of the fraudulent sellers provided copies of forged passports as evidence of their ownership.
Some provide excuses as to why they can’t provide identification. One recurring excuse blames the embassy, with a story like “I’m currently renewing my visa, so the embassy has my passport.”
One listing relationship with a fraudulent seller was terminated early on when the real estate licensee heard from local residents that the actual owner loved that property, so they were surprised that he would ever want to list it.
In one instance, a member with a real listing had to call a different brokerage firm to find out why their yard sign was already on the property. The answer, of course, is that one of their “sellers” was the actual owner, while the other was a fraudulent seller.
Another listing relationship progressed to the point of opening a file with a title agent. However, the title agent was able to discern that the passport provided by the alleged “owner” was fraudulent.
One likely fraudulent seller claimed to be a German citizen who would be traveling throughout South Africa during the term of the listing.
At least one of the fraudulent listings was for vacant lots owned by a person who is deceased.
Many of the properties listed for sale were vacant land, although we have also heard about residential and commercial properties.
Many of the listings seem to be for properties outside the member’s usual farming area, so they are less familiar with the local scene.
A number of these listings have moved to the contract stage, where the fraudulent owner is willing to e-sign an agreement and begin moving towards closing.
As you can see by these bullet points, it’s hard to pick out a consistent red flag. In some cases, the fraudster makes excuses about why they can’t provide identification. In others, they provide fake identification. Sometimes, the owner is deceased or foreign, while other times the owner is alive and well – and in one case actively trying to sell the property themselves!
We haven’t heard any confirmed stories of a fraudster who made off with someone else’s money, whether by deposit or a transaction that made it all the way through closing. That said, we’ve only been hearing these stories for a few months now, and it’s a new fact pattern for us. We will continue to monitor the situation, and any insights you can share from the field are welcome! Florida Realtors members are welcome to call our Legal Hotline Monday through Friday, from 9:00 a.m. to 4:45 p.m. at (407) 438-1409.
For more information, visit WINK’s website. This television station posted a newscast that outlines a number of these scam attempts in Southwest Florida.
There is a similar scam that has been around for a while, and it’s worth mentioning, as a reminder. It’s the fake landlord scam. In this case, a scammer locates vacant residential property and posts a fraudulent rental listing, often on Craigslist or similar message boards. Many unsuspecting tenants have been defrauded out of deposits and advance rents delivered to fraudulent landlords, so they should always be on the lookout for red flags when renting.
Source: Florida Realtors®