Forget the fake rental scam (well - not completely!). A new scam has taken over and rocked the real estate industry in 2023, and we won't be surprised if we see more of it in 2024. The vacant land scam is proving to be rather simple for fraudsters, and in some situations, rather profitable.
What IS the vacant land scam?
The vacant land scam takes place when a fraudster reaches out to a real estate agent and asks them to list "their" property - vacant land. They send all correspondence through either email or text message. Recently, advanced fraudsters have even done plenty of phone call communication, but will not agree to do a FaceTime or zoom call.
The fraudster impersonates the landowner, even providing identification that looks real. They'll also provide practical reasons for why they can't be at the closing in person.
Their ultimate goal is that the real estate agent will believe them and list the property, the title company won't catch it, and the sale will close with proceeds being sent to the fraudster.
If this happens, the buyer does not technically own the property as the true seller did not deed it to them. The seller can also be caught in a difficult situation as their land has been "sold" without their knowledge.
Are the scammers ever successful?
While we have caught many vacant land scammers, we have never closed one. Knock on wood! But other vacant land scammers have been much luckier. Check out this story from CNN on a Connecticut landowner who returned to his hometown to check on his land and found a $1.5 million home built there!
How do I avoid falling for a vacant land scammer?
The good news about the vacant land scam is that there are predictable patterns that the fraudsters use. The scam starts with the listing agent, so stopping it can start with the listing agent too! Here are the red flags to look out for:
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Seller reaches out through a lead generation service
Claims they have land to sell ASAP
Land is free of any liens or mortgages
Need a cash offer
Want to list for assessed value (less than market value) to encourage a quick sale
Will not FaceTime/zoom/video conference with you
Claims they are from or in another country (sometimes state) which prevents them from attending closing
Excuses include being away for an important job, for military service, or most frequently because they or someone they care for is ill
Provides identification that is not local
If you run into a potential listing where these red flags are popping up, here's what you can do to avoid listing a property that isn't actually for sale:
Request a video conference meeting
Request copies of identification
Don't allow your seller to arrange their own closing
Use trusted title companies and attorneys
Have your landowner clients sign up for property fraud alerts. Learn how to do so here!
We at Cohen Closing have become accidental experts in the vacant land scam as we have seen many attempts over the past year. We have more than a few tricks up our sleeve to confirm whether a seller is real or a scammer. If you think you've been contacted by a vacant land scammer, reach out to your contact at Cohen Closing to get to the bottom of it!