Of all the things that can get stolen, vacant land isn’t something you’d expect. But a recent uptick in fraudulent vacant land sales is becoming more frequent.
It’s even happened in Steamboat recently, when a seller contacted two different well-known local real estate agents to sell a vacant lot in the Club House Drive area that was valued at over $500,000. Fortunately, both agents did their due diligence and checked public records to confirm ownership of the property, tracked down the owner’s contact information and reached out to them directly, only to discover the listing was not for sale and the person who contacted them was not the owner.
According to the FBI, losses from real estate and rental scams across the United States reached nearly $400 million in 2022. The National Association of Realtors alerted the industry to vacant land schemes back in October 2023. Scammers will look for vacant land properties, specifically for those without a mortgage or loan. Then they pose as the owner, contacting local brokers to sell a property they don’t actually own, luring brokers with listing prices below market value they know will get snatched up quickly.
“People who are trying to commit fraud look specifically for vacant real estate. They check to make sure the owner is not in the area. They might do surveillance to make sure there is no activity on the property,” says Nikki Politte, Executive Coordinator, Executive Title Services Steamboat Springs, “It’s easy for anyone to be able to search public records to get mailing addresses and confirm that the sellers live out of state.”
Once they get the all-clear, Politte explains, they pop a sign up, and then impersonate the owner by selling the property in their own name. “Landowners in Steamboat are especially susceptible to this fraud because there are so many second homeowners, people who invest in land from out of state and then don’t do anything with it for several years and aren’t around to keep an eye on it.
There are several steps brokers can take to ensure they are in fact speaking to the real seller and not a fraudster. First, they can check public records, especially if they are contacted via email. The agent can look at vesting deed to see who currently owns it and then investigate how it’s owned and titled. “One thing we tell brokers is to talk to them on over the phone or in person, and start asking specific questions about the property, such as is there a septic system, a well, a survey? Most fraudsters will not know the answer to these questions. If it’s not the actual owner they’re not going to know the answer or avoid answering it. That’s a big, red flag,” Politte says.
Brokers can verify identity through various name search sites and then call them to make sure it’s the right person (check out asfastpeoplesearch.com, truepeoplesearch.com and nuwber.com). They can also send an actual letter to the address that’s on file for the County Tax Notice. “There are a few different ways to make sure they are who they say they are,” Politte says. Title companies are also actively doing due diligence to mitigate the possibility of fraud. “No matter what, the sale has to come through the title company because assurances are required in the state of Colorado,” Politte says.
There are other red flags, Politte says. “Check email communication carefully. Fraudsters will often dig through public records to find how the title is held and create email addresses that mirror the name the property is held in. Look for repetitiveness, grammar, and spelling errors in emails.” With this level of fraud even a notary stamp can be fake.
If you have been a victim of fraud, report immediately to local authorities, banks and the FBI Internet Crime Complaint Center (ic3.com). The IC3 will most likely not respond, so it’s important to speak to local authorities, but they do compile data and look for patterns. Start with your local law enforcement agents and get a case number. Most of the time, funds are sent to a fraudulent account, and the funds are put into multiple crypto accounts within 24 hours. If a wire was sent, report it to your bank immediately and call them often to make sure the wire has been recalled and get confirmation that someone is looking into the fraud. You can also report to your local Secret Service Field Office.
At the end of the day verifying a land owner is going to offer the best protection. “Now that we’re aware of this particular fraud, both brokers and title companies are being even more thorough with our due diligence and we’re paying attention to the warning signs,” Politte says. Talk about having your shirt stolen right off your back, now it’s time to protect the land beneath your feet, especially if it’s vacant.
