Happy New Year from the Colorado Title & Closing Services team!

While we’d love to provide only positive updates for the beginning of the new year, there is a growing trend that we want to make sure we alert our Realtor friends about as we head into 2023: Fraudulent buyers and sellers.

We’ve shared the dangers of fraud before. Fraud in any form costs you money and time and can do significant harm to you or your clients. Fraudulent buyers and sellers, though, can pose a significant risk because you might not always know to be on the lookout for them.

A fraudulent seller is someone looking to list a home or vacant land they do not own, while a fraudulent buyer may pretend to want to buy a house in order to get money through a refund of the earnest money, causing you to miss out on real people wanting to buy.

Don’t let these fraudulent “clients” ruin your year. Here are 6 red flags to look out for:

  1. The fraudulent buyer or seller only makes contact via email or text. If they do not want to talk on the phone, that is a big red flag.
  2. The buyer wants to purchase a property sight unseen and close in a short time. Because it is going to be a quick closing, they do not want to send earnest money. A scammer may also not ask the regular questions you’d expect a buyer to ask.
  3. The buyer says they’re out of the country or away for a period of time. They have an excuse for why they are unable to wire earnest money.
  4. Sellers may give excuses as to why they can’t provide identification.
  5. Many of these sellers will try to list vacant lots. They either claim to be the real owner or forge a deed to themselves and then want to list it right away.

They look for property owned by individuals living out of the country.

You can keep yourself safe by confirming all documents, such as driver’s licenses, verifying with banks that funds have cleared before completing a transaction and overall trusting your gut if something seems off. Fraudulent buyers like to use forged Cashier’s Checks for earnest money and/or purchase funds. If in doubt, insist on wired funds for the earnest money and purchase funds.

The Colorado Title Services team is always committed to the safety of our clients and those you represent. With over 75 years of experience in the real estate and title industry, we can help answer any questions you might have about all types of real estate fraud. Reach out to us whenever you need us!