How to Avoid Foreign Homebuyer Fraud: Most foreign property buyers have a legitimate interest in buying a property in the U.S. However, the increased number of scams in the real estate market from fraudulent out of state buyers have increased, causing title companies and real estate attorneys to lose time and money.
How to Avoid Foreign Homebuyer Fraud: Know the scams
The first person that is contacted by the fraudulent party is usually the real estate agent. After they inquire about the property, they send information proving that they have the funds to purchase the property, and then ask to be referred to an attorney.
After the “buyer” gets in contact with the attorney, he sends a fake cashier’s check and asks the attorney to deposit the check in a trust account. Once the scammer knows the check is in the trust account, he will come up with an excuse to ask for the money back and have it deposit in a foreign bank account. When the attorney’s bank realizes that the check was fake it will be too late to recover the money that was drawn from the attorney’s trust account.
In most instances where scams take place, the prospective client will use an email address from one of the large services instead of a personal website address, claim to be a professional with a title that suggests wealth, or mainly be interested in land that is vacant. To avoid these scams, the first thing real estate agents should do is to confirm the identity of the client by verifying through a letter that the person is the true owner of the record.