Real Estate Fraud Alert
There are many ways scammers can try to steal money in transactions involving real estate. Two of the most common are “impersonator fraud” and “wire fraud.”
Impersonator Fraud: Impersonator fraud is where one individual claims to own a certain property and offers it for sale. In this type, the REAL property owner has no idea they are being impersonated. Given the hot real estate market in Middle Tennessee, selling property does not take very long so it is critical to be diligent in all phases of a real estate transaction. We see this type of fraud most commonly happen when dealing with vacant land for sale. Look out for these red flags: the listing agent and selling agent are the same, the contract is signed electronically, and there is a short closing period.
Of course, another important thing to look out for is the competency of your title and escrow company. Your title company should, at minimum, do the following to ensure the transaction’s legitimacy:
Contact the bank to confirm the seller’s wiring instructions are a match to the seller’s name on the account;
Compare the seller’s driver’s license with social media posts to make sure it is the same person;
Researching the ownership interests in the property via a variety of measures including public property recordings, address and phone number verification, social security or taxpayer identification number matching.
Wire Fraud: Another type of fraud that is more common these digital days is wire fraud. It continues to be one of the most common cybercrimes in the US and according to the FBI 11,578 people were victims of real estate wire fraud in 2021.
How does this happen? This theft typically occurs near the closing of the transaction, when the buyer and seller’s information is flowing between the real estate agent, the mortgage bankers, and the closing company. A scammer will pretend to be an employee of one of these entities and will ask for personal information to complete the closing. They only need minimal information to then redirect the money either the buyer or seller are supposed to receive to their own account. Be careful! These thieves are very sophisticated. For example, their email address and phone numbers will be very close to the legitimate addresses and numbers and when they impersonate either a real estate agent or lender, it is difficult to separate them from the real people helping with the transaction.
Whether it is impersonator fraud or wire fraud, Hywater Title is hypervigilant in ensuring that these scammers do not infiltrate any transaction we close. Our cyber security, processing, closing, and wiring procedures have stringent safeguards to prevent wire fraud, ensuring that the correct parties receive the correct amounts of funds due to them. We also have strong personal relationships with the real estate professionals we work with and the personal connections allow us to spot a potential hacker more easily than those who do not cultivate personal connections.
