How to Prevent Seller Impersonation in Digital Real Estate Transactions

In today’s digital landscape, fraudsters constantly find new ways to exploit online platforms, and real estate is no exception. One alarming trend is Seller Impersonation Fraud, a scam where criminals pose as legitimate sellers to trick unsuspecting buyers. These fraudsters often use tactics like creating fake online stores, impersonating well-known businesses, or hijacking the identity of an actual property owner. Their goal is simple: deceive buyers into making payments for properties or goods that either don’t exist or aren’t as advertised.

Seller impersonation can be financially devastating for victims. Fraudsters use stolen personal information or employ sophisticated social engineering techniques to appear trustworthy, making it easy to fall into their trap. Once a transaction is made, the buyer may never receive the promised product, or worse, they receive something completely different, often of little to no value. In the context of real estate, this could mean losing large sums of money on fraudulent property deals. To avoid such scams, it’s crucial to understand how seller impersonation fraud works and how to protect yourself in digital real estate transactions.

3 Examples of Seller Impersonation Fraud in Digital Real Estate

Impersonating Property Sellers – One common form of seller impersonation fraud involves criminals pretending to be the legitimate owners of properties for sale. These scammers often reach out to potential buyers directly, offering the property at a discounted price to entice interest. They may ask for a deposit to “secure” the deal, claiming that the property is in high demand or that the price is only available for a limited time. They disappear once they receive the deposit, leaving the buyer with nothing but financial loss and frustration.

Phishing Emails – In another scheme, fraudsters send phishing emails that seem to be from reputable real estate agents or title companies. These emails are designed to look convincing, often using logos, names, and even email addresses that closely mimic legitimate businesses. The email aims to trick the recipient into sharing personal or financial information. Once the scammer obtains this information, they can commit identity theft or initiate unauthorized wire transfers, resulting in significant economic harm to the victim.

100% Fake Property Listings – Perhaps one of the most damaging forms of seller impersonation fraud is the creation of entirely fake property listings. Scammers will advertise properties online at meager prices that seem too good to be true. Interested buyers are asked to wire a deposit or make a “good faith” payment to hold the property. However, after the money is sent, the buyer quickly realizes that the property either doesn’t exist or isn’t available for sale. Unfortunately, the scammer is long gone by that time, and the buyer’s money is lost.

3 Easy Ways to Avoid Being a Victim

• Meet in Person! It’s not uncommon for sellers to live out of town in real estate, but that doesn’t mean you should skip meeting them. If an in-person meeting isn’t possible, use technology to your advantage. Always arrange for a video call with the seller before making any payments. During the call, ask the seller to present a government-issued ID, such as a driver’s license or passport. Make sure their face matches the ID and that the details on the ID align with the information they’ve provided. This step helps ensure that the person you’re dealing with is who they claim to be. Present this as your standard practice for out-of-town sellers, so it doesn’t appear accusatory.

• Do Your Homework! It’s important to cross-check any information a seller provides you with publicly available records. You can use tools like reverse phone lookup to verify the seller’s contact details and public property records to confirm their ownership. Additionally, ask the seller basic questions about the property that only the owner would know. For example, ask how long they’ve owned the property or what their favorite aspect of the property is. These questions, while simple, can help you determine whether the person is truly the owner.

• Leverage the Best in Technology! Closinglock not only verifies identities but also tracks and logs all interactions, providing an audit trail that can be invaluable in preventing and investigating fraud. Identity verification, secure payment processing, wire instructions and tools, verification of payoffs, secure document sharing, and eSigning come standard in the Closinglock platform. By modernizing the transfer of funds and information, the feature-rich software provides unmatched security and convenience for title agents, attorneys, buyers and sellers alike – Perfect for minimizing fraud risk!

Closinglock provides fraud prevention technology to the real estate industry and helps companies, law firms and financial service providers overcome critical challenges ranging from wire fraud to seller impersonation.