Estimated duration: 3-4 minutes
SALT LAKE CITY — The Utah Department of Commerce’s real estate division is urging land buyers and owners to beware of fraud regarding vacant lots and parcels.
In a press release Wednesday, the department said it had been notified of at least 10 different instances of the scam, adding that it suspected others had occurred.
Frauds often involve vacant lots listed on third-party real estate sites such as Zillow by impersonating the owner. According to the release, they are often found below market value due to their sale by owners.
Jonathan Stewart, head of the Utah Real Estate Department, said: “We are aware that two transactions have been closed and there may have been dozens of attempts.
Commerce Secretary Margaret Busse said this type of fraud is harmful because it undermines confidence in the real estate market.
“But this scam shouldn’t deter anyone. It means buyers should be extra careful with this particular type of listing,” Busse said.
Scammers typically claim to be out of state and communicate only by email or text, according to the department. They are also seeking expedited closing, including the use of remote notary and title services.
Mr Stewart said: “Vacant lots and parcel listings are easier targets for scammers because they often have little reason to actually visit the property. , can more easily pretend to be a seller.”
To avoid this type of fraud, the department recommends heeding the following red flags:
- Listing contains vacant lots (rarely vacant condos)
- Seller is not in Utah and may claim to be out of country
- Seller only signs documents remotely, no one will meet locally
- Seller does not provide detailed information about the property
- Generally, we cannot provide information about club membership, HOA dues, HOA transfer fees, utility bills, water rights, water distribution, etc.
- Vacant land is listed at a price significantly below market value\
- Sellers are rushing to close
- Sellers act aggressive or aloof
Agents are also encouraged by the department to take extra precautions to avoid this scam.
“If you have been contacted about the sale of a vacant lot, or if you represent a buyer considering a vacant lot, do your due diligence and verify that the seller actually owns the property.”
These steps are:
- Research the merchant’s name and verify photo ID
- Take extra steps to identify land owners
- Ask specific questions about property details
According to real estate attorney Shane Norris, the scam list began appearing months ago and culminated in a deal.
“I was shocked to hear that a fake seller had sold this property to a buyer and the transaction had actually been completed,” Norris said.
Norris, General Counsel for Summit Sotheby’s International Realty, said it was a terrifying type of scam. He’s now spreading the word and learning that Utah isn’t alone.
“Then I heard they closed in Hawaii and Colorado,” he said.
For closed deals Norris knows of in Summit County, the buyer had title insurance, he said.
“It was between $750,000 and $800,000, so this was no small deal,” he said. “This was a good amount.”
Summit County encourages residents to protect their property with anti-fraud guards available from the Registrar’s Office. It can give people early warning of property fraud.
If listings of this nature are found, the department says they should report them to the listing site or brokerage firm. Reports can also be made to the Real Estate Department. website.