Surging real estate scams put older American property owners at risk

For many seniors, a good portion of their wealth is tied up in their home equity. In fact, the National Council on Aging states that over 79% of older Americans are homeowners, and the median equity for homeowners 65 and older is $250,000.

Home equity doesn’t just represent a big portion of the wealth of retirees. Having a paid-off home, or at least a home with a low mortgage, is often essential for seniors to be able to afford to cover their costs while living on a fixed income.

Yet a disturbing surge in real estate scams is currently putting senior property owners at risk.

Here’s what retirees, and others who don’t want to get scammed, need to know about the tricks criminals are currently pulling to separate retirees from a key asset.

A real estate scam is targeting retirees

According to Townlift, real estate scams involving seniors are on the rise in Park City, Utah. Specifically, scammers are targeting empty lots owned by people 65 and older who live out of town.

The Park City Board of Realtors was the first to identify the scheme. Bob Bermis, the Multiple Listing Service (MLS) director on the Board of Realtors, told Townlist of more than two dozen scam reports just since the beginning of May. 

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The scam involves criminals listing properties for sale that do not belong to them. Out-of-town owners may not even be aware that these criminals are trying to sell their homes or land out from under them. 

Fortunately, no fraudulent sales have actually been completed yet, although Bermis explained that there had been a close call and a sale almost went through until an investigation from the title company discovered the fraud. 

Still, the problem is widespread enough that real estate agents are now highly suspicious of wrongdoing when they are told of a new property on the market. 

“Now, anytime that I get a call about listing a lot, my first thought is, it’s fraud,” explained Dawn Chapman, a Park City realtor. 

Watch for red flags of a real estate scam stealing building lots from seniors 

Real estate agents in Park City have become skilled at identifying potential signs of fraud, given how common this scam has become. Chapman outlined some signs that suggest a listing isn’t legitimate.  These include:

• A caller interested in listing a property for substantially below market value
• Callers who say that the sale is urgent
• Callers who want to list a property and sell it as soon as possible

When seniors are not present, they can also ask neighbors to watch for signs of trouble. For example, in some cases, neighbors have been able to spot “For Sale” signs and conduct their own investigations to see whether the sale is legitimate. 

Seniors face a serious threat from real estate scams

While reports of this latest scam are surging in Park City, this is far from the only threat to retirees who own property. 

The Federal Bureau of Investigation warned in April of a “steady increase in reports of quit claim deed fraud,” which occurs when “fraudsters who forge documents…  record a phony transfer of property ownership.

Criminals can then sell either the vacant land or home, take out a mortgage on it, or even rent it out to make a profit, forcing the real owners to head to court to reclaim their property.”

The National Association of Realtors also highlighted the risk, reporting that:

• 63% of survey respondents said they were aware of title fraud happening in their local market in the past year.
• The highest rate of title fraud was in the Northeast U.S., where 92% said they were aware of title fraud in their area.
• 52% of title fraud schemes involve land, while 12% involve an existing owner-occupied home, and under 20% involve detached single-family homes.

Retirees need to be aware of this risk and should carefully monitor their property, especially if they are away for long periods of time.

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