In the previous two weeks, first, in Part 1, we took a bird’s-eye view of why paying attention to real estate fraud and scams is so essential, and then, in Part 2, we zoomed in on some common scams faced by buyers. This week, we pivot and look at several fraud efforts that seek to dupe sellers as well as our EMTAR members, leading to potentially big financial losses, as well as emotional stress and legal complications.

Double Selling and Offering “Ghost” Listings

In these related schemes, scammers will try to sell a property multiple times or list properties without an owner’s consent.

In double selling, a single asset, usually a property, is illegally “sold” to two or more buyers, with the scammer pocketing the proceeds from each transaction. The baddies may try to do this by making fake competing mortgage claims (copying a loan file), impersonating a legitimate property owner (and taking the money before the scam is discovered), or selling a property to two unsuspecting buyers at the same time (with simultaneous closings scheduled to keep everyone fooled until it’s too late).

A ghost listing scam is a fraudulent ad for a property that is not actually available for sale. Scammers use these fake listings to trick prospective buyers into sending them money, sensitive personal details, or both. In some cases, the scam involves an actual property that is either occupied, already sold, or not on the market. In others, the property might be completely nonexistent. These scams primarily target people searching on online marketplaces like Craigslist and Facebook Marketplace, where posts are not always verified. 

Setting Up a Fake Escrow Account

In this category of fraud, would-be thieves create fake escrow accounts to deceive sellers and agents.

The fake escrow scam typically involves trying to trick sellers (or buyers) into sending money to a fraudulent account run by the bad guys. The scammer creates a fake website or email that looks like a legit escrow company. They then either pose as a party in the transaction or as the escrow agent themselves, providing fake instructions for wiring funds directly to their account. This bypasses the real closing process, causing the victim to lose their money when the scammer disappears.

Fraudulent Referrals and Payment Requests (Wire Fraud)

Finally, here a scammer might create fake invoices or payment requests to REALTORS or sellers.

A fraudulent referral scam involves a professional or insider, such as an agent or lender, who knowingly misrepresents information to a borrower or other party for personal gain. This can include providing false info about income, down payments, or property value, or participating in related schemes to abuse the lending process. These scam attempts will often try to secure a loan illegally or to unjustly acquire a property's equity.

Lastly, a payment request scam, also known as wire fraud, involves scammers tricking buyers into sending money—such as a down payment or closing costs—to a fraudulent bank account rather than to the legitimate title or escrow company. Scammers make this slick and alluring by impersonating real estate agents or title company employees through hacked or spoofed email and phone numbers. They then try to create a sense of urgency as they provide fake, but seemingly legitimate, wire instructions.

Only Scratching the Surface

These are just a few of the many ways the baddies out there continue to develop nefarious schemes aimed at defrauding real estate sellers and REALTORS. As always, it is wise for all of us to remain on alert, on guard, and on the lookout for any and all attempts to cheat us on the selling side of a transaction.

Keep an eye out for red flags. Trust your gut if something doesn’t feel right. Sellers, you can rely on the expertise of your REALTOR and the high standards of both excellence and ethics they are sworn to uphold. And never hesitate to raise a hand and ask if something seems off.

Vigilance is needed throughout the sale of any property. When our antennae are up, we are much less likely to fall victim to a scam.

EMTAR’s Commitment to Sellers

Once again, to reinforce what are noting in every blog in this October series, we believe it is vital to shine light on some of today’s most prevalent and potentially damaging real estate scams, so that sellers, buyers, and REALTORS are that much more aware and better able to identify and prevent them.

This is part of EMTAR’s longstanding commitment to serve alongside our members as “your partner in success,” providing resources and tools aimed at increasing awareness of key aspects of the real estate transaction process.

**We hope you will stay tuned for next week’s final installment, “Part 4: How to Protect Yourself and Your Clients.”**

About EMTAR: Chartered in 1969, our Association’s 1,200+ REALTORS® are a proud part of the 36,000+ members of Tennessee REALTORS® and of the 1.5 million+ members of NAR, all working to serve the public and protect the rights of America’s property owners. EMTAR members are known not only for their unmatched real estate excellence and high ethical standards, but also for being generous, hospitable, others-focused, loyal, hardworking, and eager to help wherever and whenever help is needed.