It’s no secret land is becoming more scarce and the allure of land ownership can be a powerful one, offering a sense of security and potential for future investment. However, in today’s world, where digital communication and remote transactions have become the norm, it’s essential to be aware of the potential scams that unscrupulous individuals can use to exploit landowners, especially those who own land free and clear. Whether you’re a landowner or a realtor, understanding these scams and taking preventive measures can help safeguard your interests.
According to Kyle Klain, co-leader of Barker Realty, “The most common scam we’re seeing is someone pretending to own a property and initiate a sale. This kind of scam is becoming more and more common. Unsuspecting buyers are spending time and money investigating potential properties and, in some rare but unfortunate cases, are actually closing on purchases. Money spent can be difficult or impossible to recover. It can also be challenging for the actual owner to clear title to the property. Title insurance plays a vital part in this.”
The Target: Primarily Landowners, Particularly the Elderly
Scammers often focus their efforts on landowners, especially those who own land free and clear of any debts or mortgages. The absence of financial encumbrances makes the property an attractive target for fraudsters. Additionally, the elderly are often more vulnerable to scams due to their trusting nature and less familiarity with modern technology.
Red Flags to Watch Out For
- Out-of-Town Owners: Scammers may prefer targeting out-of-town landowners as it can be more challenging for the owners to oversee their property regularly.
- Avoidance of In-Person Meetings: One of the most significant red flags is the scammer’s reluctance to meet in person or visit the property with a realtor. Legitimate sellers would typically be willing to meet a realtor or buyer in person to inspect the property.
- Lack of Valid Identification: Be cautious if the potential seller cannot provide valid identification. It’s a sign of potential dishonesty and should raise suspicions.
- Pressure for Quick Closings: Scammers often try to rush the closing process, putting undue pressure on the buyer and/or realtor to finalize the deal quickly. This urgency is a common tactic used to prevent victims from thoroughly investigating the seller’s authenticity.
- Offering Below Market Value: Fraudsters might attempt to lure buyers with an attractive asking price that is significantly below the property’s market value. This ploy is intended to entice quick acceptance without proper due diligence.
- Lack of Property Knowledge: If the potential seller cannot provide detailed information about the property, it’s a strong indication that they are not informed about the land they supposedly own.
Protective Measures for Realtors
- Insist on In-Person Meetings: Always request an in-person meeting with potential sellers. If they refuse or give excuses, exercise caution.
- Verify Identification: Ask for valid identification documents and verify them thoroughly. This helps ensure the person you’re dealing with is who they claim to be.
- Check County Records: Use official county records to confirm the ownership of the property. If there’s a discrepancy between the person claiming to be the owner and the records, proceed with caution.
- Request Property Details: Legitimate sellers should have a genuine interest in the property. Ask them for specific details about the land, its features, and potential usage. Scammers often lack this knowledge.
Steps Landowners Should Take
- Hold Property in a Trust or other legal Entity: This adds an additional layer of protection and makes it more difficult for scammers to impersonate you.
- Stay Informed: Educate yourself about common scams and warning signs. Staying informed is your best defense against falling victim to fraud.
In the complex world of property transactions, vigilance is your greatest asset. By being aware of the tactics scammers use and taking proactive steps to protect yourself, you can enjoy the benefits of land ownership without falling prey to fraudulent schemes. Klain said, “We are working hard to stay ahead of these fraudsters and are educating our brokers in the different tactics they may use and what red flags to watch out for. Remember, if something seems too good to be true, it probably is”.
