Real estate fraud warning issued due to increase in fraudulent property sales
SAN LUIS OBISPO COUNTY — In recent weeks, the San Luis Obispo County District Attorney’s Office has investigated seven cases of real estate fraud involving criminals who pose as property owners and contact real estate agents to sell properties they do not own title to.
The fraudsters engage the real estate professionals by impersonating the property owner and negotiating the sale of properties that are either vacant or lien free. Law enforcement agencies across several California counties have observed a sharp increase in such reports of real estate fraud associated with the sale of vacant land and unencumbered property.
District Attorney Dan Dow urges all real estate professionals to be aware of this new scam and exercise caution when conducting property transactions. The fraudsters search public records to identify real estate that is free of mortgage or other liens and to identify the property owner. The properties often include vacant lots or rentals. The criminal then poses as the property owner and contacts a real estate agent to list the targeted property for sale and requests it be listed below the market value to generate immediate interest. The criminal requests preference for a cash buyer and quickly accepts an offer. The criminal then refuses to sign closing documents in person and requests a remote notary signing. The criminal or co-conspirator impersonates the notary and provides falsified documents to the title company or closing attorney. The title company or closing attorney unwittingly transfers closing proceeds to the criminal. All communication is electronic, not in person.
Property owners are encouraged to check their property address using a trusted real estate website such as Zillow or MLS (Multiple Listing Service) to determine if their property has been fraudulently listed for sale. Additionally, owners may conduct a property title search using the County Clerk-Recorder website official record search. If an owner discovers that their property has been fraudulently listed for sale or sold, they should contact District Attorney Investigator Eric Vitale at (805) 781-5868.
The burden of verification is on the real estate and title companies, and it is essential to prevent falling victim to the scam. Real estate professionals are urged to conduct open-source research for the identity and a recent photo of the purported seller, request an in-person or virtual meeting, and see government-issued identification. Be on alert when a seller accepts an offer below market value in exchange for receiving payment in cash and/or closing quickly. Use trusted title companies and attorneys for the exchange of closing documents and funds.
The San Luis Obispo County District Attorney’s Office Real Estate Fraud Unit has already notified county-wide real estate associations, title companies, and the County Clerk-Recorder’s Office. District Attorney Dan Dow urges all real estate professionals to be vigilant and report any suspicious activity.