Spotting the Signs of Real Estate Seller Impersonation Fraud

An increasingly prevalent type of real estate scam involves a fraudster posing as the legitimate owner of a property in order to sell it and pocket the proceeds. Seller impersonation fraud can cause financial loss and legal complications for unsuspecting buyers and legitimate property owners. It is vital to understand how these scams operate and to recognize telltale red flags.

In a typical seller impersonation fraud scenario, the scammer first identifies a target property, often one that is vacant, investment-owned or otherwise not regularly occupied or monitored by its rightful owner. Using publicly available records, the fraudster gathers information about the property and its legitimate owner’s identity. The scammer then contacts a real estate agent or listing service, posing as the owner and expressing interest in selling the property, usually at a price slightly under market value.

When a buyer is found, the fraudster will communicate via email, phone, or text, often stating they cannot meet in person due to travel, illness or other business obligations. Documents such as government IDs, deeds or powers of attorney can be forged or altered to support their claim. Once the sales process begins, the impostor pushes for a quick, often all-cash transaction, and requests remote, wire or escrow transfers to collect the sale proceeds.

Several red flags can signal potential seller impersonation fraud:

1. Unusual seller behavior — The seller insists on remote communication only, is unwilling or unable to meet in person or by video call, or claims to be unavailable due to travel, military deployment, illness or foreign residence.
2. Rush to close — The seller requests an expedited closing, presses buyers or agents for urgency and is often willing to accept offers below market value or forgo standard due diligence and inspections.
3. Requests for unconventional payment methods — The fraudster pushes for wire transfers or i for other hard-to-trace transfers.
4. Errors in documentation — Inconsistencies may be noticeable in the seller’s provided documents, such as mismatched names, blurry identification, incorrect signatures or altered dates.
5. Lack of local knowledge — When fielding questions about the property, the supposed owner may be unfamiliar with details a real owner would know, such as neighborhood features, property history, or recent updates.
6. Title or mailing address discrepancies — The address on the seller’s identification doesn’t match public property records, or all communication occurs by email rather than phone calls or letters.

To shield yourself from seller impersonation fraud, take these positive actions:

• Insist on meeting the seller in person or through secure video call and confirm their identity through multiple sources.
• Conduct an inspection of the property before making an offer.
• Carefully review the seller’s identification and compare it to title documents and public records.
• Engage reputable agents, attorneys, and title companies who are familiar with these scams and conduct thorough due diligence.
• Independently verify ownership directly with the county assessor, recorder’s office, or the legitimate owner’s contact details.
• Retain an experienced real estate attorney to protect your interests.

At The Law Firm of Richard L. Ellison, P.C. in Kerrville, Texas, I represent individuals and businesses in real estate transactions and litigation. To schedule a consultation, call my firm at 830-955-8168 or contact me online.