GUEST COLUMN

Kara McGregor / Sr. Vice President, Independence

New Year Brings Fresh Fraud Schemes

Real estate transactions continue to be a target for increasingly sophisticated forms of fraud, and there’s a new game in town involving fraudulent sellers. I spent some time with our leadership team at Independence Title, a room full of experts in title, escrow, and legal matters, to put together some good information and best practices for our real estate community.

Some of these newly emerging scams are very evolved, with criminals researching public records to identify properties and owners and obtaining fake ID’s and other falsified documents. Typically, they contact a Realtor to list the property in order to legitimize the sale. The property is often listed below market rate for a quick sale, preferably cash. Communications are typically via email and text, although some fraudster sellers have communicated by phone, and the scammer generally insists on a remote closing. Very often these criminals act intimidating, hurried, and pushy.

As the first point of contact for these types of scams, Realtors should be aware of specific red flags, and adopt a few best practices:

• Request an in-person meeting or Zoom with the proposed seller. Consider it a red flag if a purported seller is reluctant to communicate face-to-face.

• At listing, ask the sellers for copies of past closing documents (e.g., title policy, survey, etc.). Consider it a red flag if they cannot produce any documentation of the purchase.

• Check seller names and addresses against the tax records and via internet search, and reach out independently to sellers at the address shown in the public records if possible.

• Check seller names against deed records (your title company should be able to help you pull this information).

• Consider utilizing DocuSignID or another document platform that supports knowledgebased authentication (KBA) to execute documents

• Talk to your title company about their seller verification procedures and advise the title company as to the specifics of any red flags you have encountered.

• Ask your title company about processes or security measures they have in place to detect fraud and protect money transfers. Make sure you’re working with a company that subscribes to a fraud protection service to ensure secure transmittal of wiring instructions.

• Be alert and trust your instincts!

We will continue to be a resource for Realtors in these matters. Please contact your Independence Title team with any questions or concerns. We must all work together to protect the integrity of our real estate community!