Instances of a relatively novel real estate scam are on the rise in San Luis Obispo County, the SLO County District Attorney’s office said Tuesday.
The District Attorney’s office has been investigating since mid-April seven instances of criminals posing as property owners who then contact real estate agents to negotiate the sale of the property the criminals themselves do not own, the DA’s office said in a press release.
Editor's note: A step-by-step guide detailing how the scheme works, how it's discovered, and how to prevent yourself from falling victim to this scam is provided at the bottom of this page. Courtesy of the SLO County District Attorney's office.
The criminals contact real estate agents and request the property be listed below market value to generate quick interest, the DA’s office said. The criminals request cash-only buyers and quickly accept an offer, officials said.
The criminals, after having refused to sign closing documents in person, request a remote notary signing. The notary is impersonated and falsified documents are provided to the title company or closing attorney, officials said.
The targeted properties are typically vacant and mortgage- and lien-free, the DA’s office said, which can be identified as such by criminals through a search of publicly available records.
The DA’s office said that law enforcement agencies in several California counties have observed similarly sharp increases in reports of this type of real estate fraud.
Property owners are encouraged to check if their property has been fraudulently listed for sale by searching trusted real estate websites, such as Zillow or Multiple Listing Services (MLS), the DA's office said.
The DA’s Real Estate Fraud Unit has notified county-wide real estate associations, title companies, and the County Clerk-Recorder’s Office, they said.
If one discovers a property has been fraudulently listed for sale, the DA’s office encourages them to contact District Attorney Investigator Eric Vitale, (805) 781-5868.
How the Scheme Works | Courtesy of the SLO County DA’s Office
- The criminal searches public records to identify real estate that is free of mortgage or other liens and to identify the property owner. Properties often include vacant lots or rentals.
- The criminal, posing as the property owner, 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, posing as the proper owner, requests a preference for a cash buyer and quickly accepts an offer.
- The criminal, posing as the property owner, 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.
How It is Discovered | Courtesy of the SLO County DA’s Office
- Often when recording the transfer of documents with the relevant county.
- This scheme has particularly affected the elderly and foreign real estate property owners as there are no means to automatically notify the legitimate owners.
- The burden of verification is on the real estate and title companies.
How to Prevent Falling Victim | Courtesy of the SLO County DA’s Office
- Conduct open-source research for the identity and a recent photo of the purported seller.
- Request an in-person or virtual meeting and to see government-issued identification.
- Be on alert when a seller accepts an offer below market value in exchange for receiving the payment in cash and/or closing quickly.
- Use trusted title companies and attorneys for the exchange of closing documents and funds.