Protecting Against Scam Sellers in Real Estate

Here’s a real-life scenario. A seller contacts a realtor about selling their land. The realtor lists the property, and receives the asking price. The buyers pay the due diligence and earnest money deposits.

While the buyers are out at the property with their surveyor during the due diligence period, they’re approached by some confused individuals who ask what they are doing. It turns out that the real owners were passing by the property and had no knowledge of the alleged sale.

In this case, the buyers were able to get their deposits back, but if the actual owners had not happened to pass by at the right time, the loss could have been substantial.

The best way to avoid this would be for the listing agent to request some form of government-issued identification early in the real estate transaction. Even then, the scammer could still use a fake ID.

It is difficult to protect against. It doesn’t happen often, but it’s not really an isolated incident.

Just being aware that it’s a possibility and being alert for anything that seems off will also help.