Tales from the (Title) Crypt: Vacant Land Boogie Man Haunts a Commercial Real Estate Developer
Ready for another terrifying tale? This story comes from our fearless (but ever vigilant and paranoid at times) National Commercial Services team.
Not so long ago, in a small town in Georgia, a longstanding client brought forth a vacant property of interest to our team. Purchasing vacant land may seem harmless but this sort of real estate transaction is often targeted by malicious fraudsters looking for unsuspecting victims. During the title search, the title vesting showed an individual in title with only an initial for their first name, which was strange. The seller also did not have an attorney and they were working through a real estate broker.
Our client, excited about the purchase, offered earnest money to help secure more time for closing, confirming account information over the phone and via email provided by the seller and broker but skeletons were soon to be discovered. During the preparations, our escrow officer and the buyer’s council realized there were liens on the property that needed to be addressed. Because the mysterious seller did not have an attorney and had not provided any payoffs for these liens, our escrow officer sent a payoff authorization form for the seller to complete and execute so our team could help obtain payoffs. With the seller gone silent, our team reached out to the lienholders to see if we could obtain any payoffs without authorization while we waited for a response.
Trying to coax the mysterious seller out from the shadows, our team prepared a draft closing statement with line items for each lien, nine to be exact, with estimated payoff in the amount of 250% of the face amount of each lien. This significantly reduced the seller proceeds from $400,000 to just $19,000. Terrifying, is it not? Surely the seller would remain in the shadows and not approve this draft. But much to our team’s surprise, the seller approved it with no push back or questions.
A sinking feeling became even more evident when Stewart Title NCS discovered the liens were in nine different names. So why wouldn’t the seller push back on any of these liens and question whether or not they were owed by them? Following proper protocol, our team emailed the seller to inform them we required authorization form for the payoffs and a completed judgement affidavit that were executed and notarized before closing by a mobile notary provided by Stewart Title NCS. This sent the seller into a frenzy of excuses. Among them:
On the same day the last excuse was given, our team received a package with “executed and notarized” documents by a Texas notary. When our escrow officer contacted this Texas notary, they revealed they had not notarized the documents and did not know the seller in any way. A fraudster was lurking in the dark trying to deceive our client and team, but our protocols were able to help unmask them and thwart their evil plot.
There are many more of these terrifying tales. In fact, more than 9,500 real estate cybercrimes were reported to the FBI in 2023 resulting in $145 million lost. Beware of red flags, stay vigilant and look out for slimy schemes!
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