Realtor warns of land sale scam in Palm Beach County that almost cost a buyer $350,000

Article first appears: https://www.palmbeachpost.com/story/news/local/2024/05/03/vacant-land-scam-in-south-florida-thwarted-by-realtor-in-palm-beach-county/73517958007/

A Palm Beach County real estate expert is sounding the alarm about a growing land scam that his company narrowly thwarted last month involving property in Jupiter Farms.

Jeff Lichtenstein, president of Echo Fine Properties, said a fraudster called one of his listing agents posing as the out-of-state owner of a mortgage-free vacant lot that they wanted to sell.

The agent agreed, listed the property and got a cash buyer willing to pay the full asking price of $350,000.

But there were red flags that something was amiss.

Realtor Jeff Lichtenstein is the founder of ECHO Fine Properties in Palm Beach Gardens, Florida on January 28, 2022.

GREG LOVETT/THE PALM BEACH POST

The alleged seller said they had recently moved to Texas from New York and hadn’t updated their address in public records. But the agent, who was familiar with the area code they were calling from, noted that they didn’t know anything about the city they claimed to be living in.

Real estate fraud: ‘We got lucky on this one … ‘

She told the title company there was something suspicious with the sale, which increased its scrutiny of the seller.

“We got lucky on this one because it’s happening all the time and has really ramped up recently in Florida, especially with vacant land,” said Joseph Reichert, an attorney for Next Wave Title in Jupiter, which was handling the closing. “We caught it early enough that the buyer didn’t put in earnest money, so no real damage was done.”

Still, Lichtenstein said the agent made the effort to list the property and find the buyers, who were disappointed in the end that the property wasn’t really for sale.

“Emotionally, they had already gotten attached to the property,” he said about the buyers. “And it’s a lot of work listing the property, taking pictures of the property, and taking calls on it.”

Real estate: ‘Seller impersonation fraud’ is on the rise

Tom Cronkright, co-founder of the fraud tracking and protection company CertifID, said seller impersonation fraud is on the rise nationwide as scammers realize how vulnerable vacant land can be, especially if the owner is out of state and doesn’t frequently visit the property.

The U.S. Secret Service circulated an alert last year saying it had observed a “sharp increase” in reports of real estate fraud associated with vacant land where criminals pose as property owners.

“If it were a house, the listing agent would have to get access to take pictures, it’s a heavier lift,” said Cronkright, who created CertifID after his Michigan-based title company was scammed into wiring $180,000 to a fraudulent account. “If they can get away with the transfer on vacant land, the people won’t know about it for weeks or months or even longer.”

Last July, a New York resident filed a lawsuit after vacant property he owns in Connecticut was sold without his knowledge to a developer. The developer started building a 4,000-square-foot house on the property that was listed for sale for $1.47 million.

The landowner, Daniel Kenigsberg, had been impersonated by a scammer who claimed to be him and said he was living in South Africa. The home was fraudulently sold in October 2022, according to the lawsuit. Kenigsberg didn’t find out about the sale until May 2023.

The case was closed April 5 with a judgment that cleared the title in favor of Kenigsberg.

“The scammers are coming fully prepared to trick somebody in whatever way they can,” Cronkright said.

In the Jupiter Farms incident, the alleged buyer sent a picture of a New York driver’s license to the title company, which later proved to be fake, but refused to send proof that they had paid the previous year’s property taxes. They were using a secure encrypted email address, and their phone number showed up in a search as attached to a previous fraud.

When a letter about the sale was sent to the true owner’s mailing address listed in public property records, the owner called immediately and said she had no knowledge of the transaction.

“She was very upset about all of it,” Reichert said about the true owner.

Real estate fraud red flags include listing property below market value

In Palm Beach County, property owners can register with the Clerk of the Circuit Court and Comptroller’s office to have a fraud alert sent to them if changes are made to official records, such as if a deed is filed on a property.

To prevent a vacant land scam, the National Association of Realtors said agents should be on the lookout for several red flags including that the seller wants to list the property for below market value, they have a strong preference for cash, they don’t want a sign in the yard advertising the sale, they claim they are out of the country, they only communicate by text or email and they want to use their own notary.

Lichtenstein said his firm is being extra careful with vacant lot sales after the recent experience.

“We need to start asking whether the client was met in person, or are they personally familiar to agent,” he said. “We’re going to have to do more, so we know who we’re working with.”