The American Land Title Association (ALTA) recently commissioned a study to gauge the prevalence of attempted seller impersonation fraud (SIF) in the title industry. According to the report, 28% of title companies experienced at least one seller impersonation fraud attempt in 2023 and 19% faced one in April 2024 alone.

At Town & Country Title, Co. we take protecting property rights seriously and understand the importance of providing information that prevents bad actors from succeeding. Read on to learn how the scam works, red flags to watch for and precautions you can take to avoid falling victim to seller impersonation fraud.

In most cases of SIF, the fraudster searches public records to identify property that is free and clear of a mortgage loan or other liens, often targeting vacant land and rental properties owned by foreigners or the elderly. The fraudster then poses as the property owner and uses an internet request, email or text message to hire a real estate agent. The property is generally listed below market value with a request for an all-cash buyer and a quick closing.

When it comes to scheduling a signing appointment, the fraudster offers an excuse for not being able to sign documents in-person and requests to use a mobile notary. Then, impersonating the notary as well (or with the help of a co-conspirator), the fraudster delivers falsified documents to the title company. Once the transaction closes, the buyer’s funds are unknowingly wired to the fraudster’s bank account. The discrepancy in ownership is often not discovered until documents are recorded with the county clerk’s office, or long after the transaction has closed.

Fraudsters use various tactics to commence seller impersonation fraud. It’s important for industry professionals to remain vigilant and use scrutiny during the entire real estate transaction. Here are some potential red flags to look out for:

• Communication is strictly via email or text. The seller uses a multitude of excuses not to have an in-person meeting or video chat.• The seller has no documentary evidence linking them to the property.

• The seller wants to list the property below market value and to only accept offers from all-cash buyers.

• The seller advises the real estate agent not to post a “For Sale” sign on the property.

• Persistence about a quick closing, even willing to offer incentives or cut corners to close sooner.

• Demands to use their own notary

To help combat the risk of becoming a victim to seller impersonation fraud, consider taking the following precautions throughout the real estate transaction.

• Always meet the seller in person or otherwise verify the identity of the seller or use a third-party vendor to verify their identity.

• Ask questions to learn the seller’s knowledge of the property that is not readily available in public records.

• Mail a letter to the owner of the property at the address listed on tax records.

• Contact the owner at an independently discovered and validated phone number.

• Require notarization from a vetted and approved notary or ask the title company to arrange the notary appointment.

• Compare the seller’s signature to the signature of the owner shown on other recorded documents.

• Follow your instincts, as they are generally the number one indicator of suspicious activity.

Homebuyers can safeguard their title to property by purchasing an ALTA Homeowner’s Policy of Title Insurance that includes protection against title defects caused by forgery or impersonation after the Date of Policy. For more information about fraud prevention and protecting the title to your property with title insurance contact Town & Country Title, Co.

If you suspect that you are a victim of seller impersonation fraud, it is vital to act fast! File a fraud report with local and state law enforcement, the Federal Trade Commission at www.ftc.gov and the Federal Bureau of Investigation (FBI)’s Internet Crime Complaint Center at www.ic3.gov.

Town & Country Title, Co. utilizes Closing Lock to provide fraud prevention technology to our valued real estate partners. Together we will navigate the evolving changes to our industry and continue to safeguard customers’ property rights.