Protecting Your Clients From New Seller Fraud Scams

By Kandie Frederick

Growing up on the central coast, Kandie is a third generation family in the North County and a second generation family in real estate. Joining Country Real Estate in 2000, and graduating from Cal Poly in San Luis Obispo, she brings a background of Agricultural Business to combine with her knowledge of the local real estate market. Working with her family and their decades of local real estate development, she is deeply connected to the roots of our community and its growth.
“This area continues to grow as people discover what a great travel destination it is, and what a great wine region it has become. Eventually, they realize what a great place it is to live and work as well. Adapting to the needs of our clients in a changing environment is always a priority. We remain the longest standing brokerage in a community we are deeply invested in. Our longevity is attributed to our innate ability to understand the North County: its people, its properties, and its culture.” -Kandie

As local agents, I’m sure we are all becoming familiar with seller scams targeting unencumbered, vacant land over the last year. Many of you attended the MLS meeting with the DA Real Estate Fraud Investigator or have had your own experiences with this and I would like to recap some of that for anyone that missed it.

The overview is that scammers are reaching out to real estate agents like us to try and sell properties they don’t actually own. If the sale went through, the REAL property owner would face significant costs and attorney fees to unwind this. YOUR time and expenses are a loss as well, PLUS YOU could have some responsibility in the end if you didn’t do some basic due diligence. Let’s talk about 3 things YOU can do to prevent this from happening and better serve your clients.

1. Know the Red Flags. We don’t want to waste everyone’s time and money on fake leads or listing a property only to find out we are not working with the ACTUAL seller. The DA shared some tips on What to watch for. Repeatedly, the scammer has an accent, and phone service is inconsistent; this is because they are in another country. They are not available to meet in person. In the email, they use words like “Kindly” …“Kindly assist with”…”Kindly provide.” They are quick to approve a CMA amount and want it listed ASAP. *Now, all of that can still indicate a REAL seller, but we are looking for signs to dive deeper with questions. We even had a case that sounded real, and was at the stage of a listing agreement and photos, but TWO people in the office had been targeted at the same time to list it & the Overlap is how that one surfaced as a fraudulent seller.

2. Do Your Due Diligence. More criteria is evolving on what to look for, but an easy way to pre-screen is to ask questions that they should know as a seller BEYOND the public record data, such as whether they have a water meter, or their well history (do they know the gpm of the production or the depth or whether it has a pump in it). Who maintains the road? Is there an HOA contact? Something they would stumble to answer if not prepared. You can also request a Driver’s license and tell them you need this before preparing the listing agreement. They will provide one & it will have the name of the owner they are pretending to be, but this helps in the DA’s case. Ask about a preference of title companies so you can order the prelim. Often they want a specific company out of the area - one they have control over. It is typically less expensive, and Easier to handle title transfer within the same county, so that can be another red flag. If anything looks questionable, send the address and contact info to the DA Real Estate Investigator, and they will run it through their database.

3. Be The Resource. As a real estate professional, you are the resource for your clients. Many clients don’t even know this is happening. Educate them about this fraud and provide them with resources they can use to protect themselves. For example, the County Clerk-Recorder website is a free way they can check the title of properties anytime. When Local escrow companies initiate an order for a Preliminary Title Report, they are mailing a letter to the owner, at the address on the tax record. Verifying that address is current, is also important. Maybe even offer to setup a search for them, so you will both be notified if their property is ever “listed” by a scammer. These are all good reasons to reach out to clients right now, and build a deeper trust.

Huge progress is being made on these cases and our DA is working hard to help stop this before these transactions close. Let’s do our part and Together we can protect our business and our clients. If you have questions about this topic or anything else, please call or email me. I am always willing to help!