Bulletin: NY000686

*This is a reissue of STG National Bulletin SLS2023003*

Dear Associates:

Recently, Stewart issued National Bulletins SLS2021007 and SLS2022004 regarding land sale fraud schemes and prevention (links below). The purpose of this bulletin is to make Stewart agents aware of the increase in the number of attempted fraudulent land sales. These scams can involve the sale of a house or other type of real property, but generally focus on the sale of a vacant lot that is owned free of encumbrances and liens.

The “scammer” has usually done online research and is familiar not only with the property itself but with real estate transactions in general. The purported seller therefore is usually able to discuss the proposed transaction with a high degree of accuracy.

Many articles and bulletins on this subject have appeared recently that provide a substantial list of “red flags”. Some of these red flags are normal aspects of a sale by themselves. However, as more of these “red flags” begin to apply to a single transaction, agents should begin to thoroughly scrutinize documents and the specifics of the transaction as they review title searches and contracts or interact with the purported owner.

Stewart Bulletin SLS2021007 sets out many important red flags and should be reviewed. Additional red flags are:

• Seller purports to be in another state or country
• Seller is in a rush to close and is willing to sell for a price that seems undervalued
• Seller seems unconcerned with withholding or closing fees and is only interested in receiving net proceeds as quickly as possible
• Seller only communicates with the agent and other parties involved by email
• Seller provides a reason for limited contact such working as an “offshore engineer” or suffering from a serious medical condition
• Email from the seller contains typographical errors or boilerplate language
• The email address is suspect (a domain in a foreign country)
• Seller claims questionable need to use a power of attorney and the agent under the power of attorney has never met the seller
• Seller ID appears suspect with use of cut and pasted photos or is devoid of security features
• Signatures of seller and/or notary are suspect
• Seller is not currently located at the address listed in the county tax records
• Documents provided by the seller are notarized in a location other than the seller’s purported location
• Wiring instructions are to a bank in yet another location

When a transaction appears or even “feels” suspect, independent research should be conducted:

• Subscribe to a database such as “PeopleFinders” and make every attempt to contact the owner directly by telephone
• Google the owner for relevant information such as an obituary
• Verify that no probate estate has been filed for the owner
• Check online real estate listings to see if the property is listed for sale and, if so, contact the listing agent and verify your transaction
• Require the seller to provide additional documentation to assist in verifying their identity
• Require the seller to email or text a picture of their driver’s license or passport
• Verify the notary through the Secretary of State where the document was notarized
• Attempt to contact the notary directly and verify the acknowledgment

For all transactions conducted by our agents, Stewart suggests the use of a “confirmation letter” sent to the seller by regular mail to the address on file with the county tax assessor as described in Stewart Bulletin SLS2022004. This simple act has proven to be highly effective in preventing fraud.

In many ways, these attempted scams are no different from the phishing and spearfishing schemes that we have grown accustomed to dealing with in emails and on social media. The main difference is in the time and money required to correct the consequences of falling victim to the scam. If you feel that something is wrong, it probably is.

In the event you have any questions, kindly contact Stewart Title Legal Services for guidance at 212-922-0050.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com. 

Forms: Vacant Land Fraud Prevention Letter