Las Vegas, NV (KXNT) - The Nevada Division of Insurance and the Nevada Real Estate Division want to bring public awareness and education to an increasingly prevalent real estate identity theft scam.
Known as “vacant lot fraud” or “seller impersonation fraud,” bad actors impersonate the owners of a property or vacant lot and attempt to sell it for their own profit.
Unsuspecting owners, eager buyers and even licensed real estate and insurance professionals guiding the transactions can all unknowingly end up as victims in these elaborate identity theft schemes. The agencies say that the best way to protect yourself is to understand how the scam works, know the red flags to look out for, and the precautions you can take to prevent this scam from happening to you or your clients.
Scammers search public records to identify owners of real estate that is free of a mortgage or other liens, most often targeting vacant lots and investment, vacation or rental properties that are non-owner occupied.
The scammer then poses as the owner and contacts a real estate agent to list the property for sale. Once an offer is made, the scammer quickly accepts it, then sends falsified documents to the title firm or closing attorney.
The closing proceeds are then transferred to the scammer leaving the fraud typically undiscovered until transferring documents are recorded with the applicable county.
Red flags to look out for:
- Seller is difficult to reach via phone or refuses to meet via video call; only communicates by text or email
- Seller sets the listing price lower than the current market value and wants a fast cash sale with little or no fee negotiation
- Seller refuses to attend signings; always claims to be out of town Seller requests to use their own notary
- Seller demands proceeds to be wired
- Seller has a different address than the owner's address or tax mailing address
- Seller refuses or is unable to complete multifactor authentication of identity verification
Precautions to take:
- Contact the seller directly at an independently discovered and validated phone number
- Send mail to the seller at the address listed on tax and property records
- Ask the seller's real estate agent if they have personal or verified knowledge of the seller's identity
- If using a remote notary, be sure the notary is fully vetted and approved by your state, or the title company should arrange for an in-person signing at an attorney's office, title agency, or bank.
- Send the seller a link to complete a third-party identity verification
- Run the seller's email and phone number through a verification program
- Ask the seller about the property that isn't available in public records
- Compare the seller's signature to previously recorded public documents
- Use a wire verification service or confirm wire instructions match the account details on the seller's disbursement authorization form
- Require a copy of a voided check with a disbursement authorization form
- Require that a check be sent for seller proceeds rather than a wire
Victims of fraud should report it immediately to: