In this day and age, we all need to be vigilant of scams that try to take advantage of us. Even when it comes to huge transactions like the sale of a home or other property, some parties to these transactions will engage in fraud to advance their own interests. Yes, title fraud still happens, and it’s dangerous in that it can hamper your ability to buy or sell a home.
To help you understand more about real estate title fraud, here’s a look at common title scams and how individuals engage in fraudulent title activity.
Real Estate Title Fraud Red Flags
Keep an eye out for these real estate title fraud red flags to ensure you don’t become a victim:
- Different Signatures: Take a look at all the documents involved in a transaction. Do the signatures look uniform? If you see any variation of signatures, take a closer look — especially if any of the other red flags listed below are present.
- Powers of Attorney: Powers of attorney are necessary in many cases, but they can also be a source of fraud and manipulation. If you get in a situation where a power of attorney plays a significant role in a transaction, be extra careful.
- Absentee Owners: Similar to powers of attorney, absentee ownership can be a sign of fraud. It’s always good to meet or at least talk to the person you’re buying property from or selling property to.
- Free and Clear Titles: Many people have mortgages or other liens on their property. Without them, we’d have a hard time ever getting financing. If you do encounter someone who owns a home free and clear, it’s important to make sure they really do own the home outright before closing.
- Presigned Documents: It’s a good idea to watch as the documents are signed in your presence. If they come in with presigned documents, it can sometimes be an indication of potential fraud.
- Cash Transactions: Fraudulent title situations are designed to get the fraudster a huge amount of cash. If there’s a large sum of money going to one party in your transaction, this could be warning sign of fraud.
- Offshore Deposits: This is especially worrisome. If there’s a large amount of cash involved and that cash is being wired directly to an offshore account, do your due diligence before closing.
Protect Yourself from Wire Fraud with Verbal Confirmation
Verbally verifying wire instructions before sending your payment is the single most important step in protecting yourself from wire fraud. Hackers have recently been changing wire transfer instructions via email right before the transfer is completed. It is vital to contact the person or company you are wiring money to before sending to confirm that all information is correct and trustworthy!
Your Solution: Title Insurance
One of the reasons title insurance exists is to help protect you from fraudulent situations like the ones above. You may purchase a residential Owner’s Policy of Title Insurance to protect you against losses related to forgery, fraud, duress, impersonation and other situations that can cloud a title. If you are obtaining a loan, your lender will require that you purchase a residential Loan Policy of Title Insurance, which protects the lender against any losses as well. If you didn’t purchase title insurance during the initial purchase, you can contact a title insurance company at any time to provide you with a residential Owner’s Policy of Title Insurance based on the appraised value of your home.
Let Title Partners of South Florida Help
At Title Partners of South Florida, we take great pride in being able to help you navigate any potential red flags and raise title questions well before closing. We want all parties in a transaction to feel comfortable at closing, especially since this is such a significant investment.
Download our free Homebuyer’s Closing Information Guide to be sure you are fully prepared for your real estate closing and contact us to learn how we make all of our closings smooth, stress-free and memorable experiences for all of our clients in Broward County, Florida and surrounding areas. Visit our site today to get a fast and free title insurance quote!