Real Estate Scams Targeting REALTORS® and Clients

In today’s real estate market, scams are becoming more sophisticated, targeting not just buyers and sellers but also real estate professionals themselves. Fraudsters are exploiting trust and urgency in transactions to manipulate deals for their gain, often leaving agents, title companies, and clients in challenging situations. As scams evolve, it’s vital for realtors to stay informed and diligent.

A New Threat: Fraudulent Buyers

One increasingly common scam involves fraudulent buyers posing as cash purchasers. These individuals often fabricate details to create a sense of urgency, pushing for quick closings to avoid thorough background checks. In some cases, they claim to work with unverifiable spouses or partners to lend credibility to their scheme.

How It Works:
  • The scammer contacts a realtor claiming to be a cash buyer, emphasizing the need to expedite the process.
  • They provide minimal documentation and inconsistent details, creating confusion and reducing the opportunity for proper vetting.
  • Once the scammer gains access to the transaction, they may attempt to extract money or personal information from agents, title companies, or clients.
Red Flags:
  • Buyer insists on rushing the closing process without valid reasons.
  • Inconsistent or unverifiable details about their identity or affiliations.
  • Refusal to provide sufficient documentation or contact references.
Best Practices to Protect Yourself:
  • Verify Buyer Information: Always request and cross-check government-issued identification and financial credentials.
  • Stick to Standard Protocols: Follow your office’s listing and transaction procedures rigorously, especially when dealing with cash buyers or tight timelines.
  • Report Suspicious Behavior: If you encounter a buyer exhibiting these patterns, report the activity to your local real estate board or fraud prevention contact.
Wider Scams to Watch For

In addition to buyer fraud, other housing scams continue to rise, targeting both realtors and their clients:

  • Rental Scams: Fraudsters post fake rental listings, collect deposits, and vanish.
  • Title Fraud: Scammers impersonate property owners to transfer titles and take loans or sell the property.
  • Foreclosure Rescue Scams: Fraudulent offers to save homes from foreclosure in exchange for upfront fees.
  • Fake Listings: Individuals pose as owners of properties, duping realtors into listing land or homes they don’t own.
    Example Scenario: Recently, reports have surfaced of fraudulent sellers contacting REALTORS® to list land or properties they falsely claim to own. These scams can be challenging to spot initially, as scammers may provide convincing fake documentation. However, diligent verification processes can reveal discrepancies, such as mismatched ownership records or unverifiable identities.
How  REALTORS® Can Safeguard Transactions
  1. Verify Property Ownership: Cross-check the property deed and ownership details with public records.
  2. Educate Clients: Inform buyers and sellers about potential scams and encourage them to scrutinize offers that seem too good to be true.
  3. Use Trusted Channels: Stick to secure and well-established platforms for communication and payment.

Real estate scams, from fraudulent buyers to fake listings, threaten the integrity of the market and the trust between brokers and clients. By staying informed and vigilant, REALTORS® can protect themselves and their clients while fostering a safer real estate environment.

Reporting Real Estate Scams

If you encounter suspicious activity, don’t hesitate to share the info with your colleagues and clients. In addition, if you encounter a real estate scam in New Mexico, it's crucial to report it promptly to the appropriate authorities to protect yourself and others.

Here's how you can proceed:
1. New Mexico Attorney General's Office

The Attorney General's Office addresses consumer protection issues, including real estate fraud. You can submit a complaint through their electronic system or by mailing a completed form. New Mexico Department of Justice

2. New Mexico Real Estate Commission

If the scam involves a licensed real estate broker, report it to the New Mexico Real Estate Commission. They enforce real estate license laws and investigate complaints against brokers. You can file a complaint by completing their form and submitting it to their Enforcement Division. NMRLD

3. New Mexico Office of the State Auditor

For scams involving public funds or government entities, contact the Office of the State Auditor. They handle allegations of governmental fraud, waste, and abuse. Reports can be submitted through their fraud reporting portal. New Mexico Outdoors

4. Federal Trade Commission (FTC)

The FTC collects information about scams to detect patterns and inform the public. While they don't resolve individual complaints, reporting helps prevent future fraud. You can file a report at ReportFraud.ftc.gov.

5. Local Law Enforcement

If you've been a victim of a real estate scam, especially involving significant financial loss, file a report with your local police department. This creates an official record and may assist in investigations. https://www.cabq.gov/office-of-consumer-protection/scams-fraud-information-1/what-can-i-do-if-ive-been-scammed

6. Better Business Bureau (BBB)

Reporting the scam to the BBB can alert others and help prevent future incidents. You can file a complaint on their website.

Tips When Reporting:
  • Gather Documentation: Collect all relevant documents, such as contracts, emails, and payment records.
  • Provide Detailed Information: Offer a clear account of events, including dates, names, and specific fraudulent actions.
  • Follow Up: After filing a report, stay in contact with the agency for updates on your case.

By reporting real estate scams to these agencies, you contribute to broader efforts to combat fraud and protect others in the community.

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