David Zawadzki grew up with a mother who was a real estate agent and he knew early on that it was not the career path for him.
“I don’t have the intestinal fortitude to do that,” he told Homes.com, reflecting on when his mother would be driving around for showings on even Christmas Eve and New Year’s Eve. “I give brokers all the credit in the world. It’s a tough game.”
Zawadzki didn’t venture too far off, staying in real estate but moving toward title insurance, which helps buyers and sellers verify ownership and identify potential issues that could impact a sale. He’s the executive vice president of business development at Chicago-based Proper Title.
Zawadzki says his industry, as an intermediary between homebuyers and public property records, can detect a scam where someone imitates a property owner and tries to sell their property unknowingly.
It's a growing scam nationwide, he said. Various state attorneys general, as well as the FBI, have issued warnings about it.
This interview has been edited and condensed for clarity:
What is the scam exactly and when did you begin hearing of it?
It’s a big issue in the title insurance industry right now and has been for the last about three years.
The biggest issue we’re seeing is with vacant land or the property is unencumbered, meaning there’s no mortgage and the seller does not live there.
In essence, these fraudsters are looking at public records, identifying these properties and approaching a real estate broker, saying, ‘Hey, I’m looking to sell my land.’
But it’s not actually the seller. They’re on the phone with an agent saying, ‘I want to list this property. I’m out of town. I need to do this quickly.’
Unless a title company catches it, they’re selling this property out from under the seller and getting the funds from it. Basically, absconding the funds.
We’ve been party to it once as have many title companies. It’s running rampant throughout the nation.
How does something like that not get caught?
People are actually getting fake IDs, reporting to be the seller. They’re saying they’re out of town, they’ll take care of having all the legal documents signed and notarized, where the notary is actually a party to the fraud.
I’ve seen artificial intelligence-generated IDs with a state ID photo placed onto a passport, but it’s basically the same picture. Or taking your image off a website.
There are people who could be using deepfakes now, where they could capture your image and voice. I have not heard of that being utilized just yet.
What happens to the buyer and real property owner?
The seller is ultimately made whole, but the buyer has all these costs out. Let’s say you’re buying that vacant land for the hopes of building a property on it and you’ve sold your property to fund it. You’re having to unravel that transaction and I don’t see how you could unravel your sales side.
It could take months because the actual underwriter on that transaction needs to review everything; it’s not instantaneous.
Does it impact owner-occupied homes?
It’s not as common because it’s a lot harder. More often than not, a person is living there and you’re going to know if a for-sale sign is up. You’re going to know if people are trouncing through your house.
What are the red flags?
If your Spidey-Senses are tingling, listen to them. If the purported seller calls, saying they’re not around. They’re reaching out through WhatsApp or numbers you don’t recognize. Or the callback number isn’t the same. Those different things compiled should trigger red flags in your brain.
It also picks up the busier companies are. From a real estate standpoint, the end of the month is very busy. Maybe you’re not looking cautiously. That’s when fraudsters are going to try and attack more, and push and bully.
How can people protect themselves?
We use a system called Closinglock, where if any red flags are identified — vacant land, seller doesn’t live there and no mortgage — it triggers an identity verification requirement. They answer questions, provide a copy of their ID and take a photo to match, and the system looks at their IP address. Other title companies use other things, but that’s the software we use.
You can sign up for alerts with the county if there’s been any type of recorded transaction within the county records.