Collins: Vacant land property scams on the rise

In recent months, reports have been coming in from across the country, including locally in Santa Clara and Santa Cruz counties, regarding an alarming rise in vacant land property scams.

This crime wave has become so prevalent that the California Department of Real Estate has issued a formal warning, urging all real estate licensees to stay vigilant. Even the legal experts at the California Association of Realtors have shared reports of suspicious claims of property ownership. These fraudulent schemes primarily target vacant land, a form of real estate that can be particularly vulnerable to scammers.

At its core, the vacant land property scam is an identity theft scheme. Criminals pose as the legitimate owners of vacant properties, often using email, text and phone communications to push the sale of land they do not actually own. The scam typically follows a set pattern:

• The fraudster offers the land at a price significantly below its market value to create a sense of urgency
• They push for a quick and streamlined escrow process, often promising an all-cash deal with fast closing
• All communications with the victim are done via phone, text or email, and the fraudster will avoid in-person interactions

In many cases, the scammer is using fake identification or stolen credentials to pose as the landowner. This identity theft, combined with aggressive marketing tactics, can catch unsuspecting buyers and listing agents off guard.

Real estate professionals and prospective buyers should be aware of the typical warning signs associated with vacant land property scams. While a single red flag may not immediately indicate fraud, the presence of multiple warning signs should raise suspicion. Here are the key characteristics of this scam:

• Targeting unencumbered land: Scammers often choose vacant, unencumbered land — land that has no active mortgages or liens — and may even target estate properties where ownership has not been properly transferred after the previous owner’s death.
• Recent deed recordings: A new deed may have been recorded recently, suggesting an attempt to erase the previous owner’s information.
• Underpriced properties: The property is priced well below market value to entice buyers quickly, with promises of a fast and all-cash sale.
• Remote communication: The scammer will not meet in person, preferring to communicate only via email, text or phone. If phone communication is used, it often comes from a burner phone.
• No “For Sale” sign: They will request that no “For Sale” sign be posted on the property, which limits visibility and may obscure fraudulent activity.
• Refusal to meet in person: The fraudster will avoid face-to-face meetings and insist on using an e-notary for document signing, sometimes choosing their own notary without consulting the buyer.
• Out-of-town sellers: The scammer often claims to be out of the country or “on vacation,” further complicating efforts to meet in person or verify their identity.
• Mail or remote closings: Even if the seller is local, the closing will often be handled remotely via mail or an e-closing process.
• Misdistribution of proceeds: The scammer directs the sale proceeds to a third party who is not listed on the property title.
• Contact from the real owner: Occasionally, the real property owner will contact the listing agent or buyer directly to inform them that the property is not for sale.

The rise in vacant land property scams highlights the importance of vigilance in real estate transactions. By being aware of the warning signs and taking the necessary precautions, listing agents and buyers can protect themselves from falling victim to fraud. As always, if something feels off about a transaction, trust your instincts and seek guidance from legal or real estate professionals before proceeding.

By staying informed and cautious, you can help combat these scams and ensure that your real estate dealings remain secure and legitimate.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected].