Tip 30-2013: Real Estate Scam
Tucker's Tip has learned of a new scam that is targeting real
estate lawyers and title companies. A potential buyer, typically from outside
the United States, contacts a well-known real estate agent and communicates his
desire to purchase a parcel of real property. The agent, in turn, speaks to a
real estate lawyer or title company and requests that the deposit money (in the
form of a cashier's check drawn on a well-known financial institution) be
placed into the lawyer or title company's escrow account.
The agent, who has a good working relationship with the lawyer
or title company, urges the lawyer or title company to begin work immediately
on the purchase. Then, the agent learns that the potential buyer cannot
complete the transaction for a credible sounding reason, like the death of a
purchaser. The potential buyer or his heir immediately requests a return of the
funds submitted only a few days before.
Here's the scam -- the lawyer or the title company returns the
funds without waiting for the original deposit to "officially" clear,
only to discover later that the original cashier's check was a fake. Those who
have been victims of this type of scam have had to pay a significant amount of
money to remedy the deficiencies in their trust accounts.
Realtors, Real Estate Lawyers, and Title
Companies need to be aware of any such scam. Banks are required by law to
make funds available within certain proscribed time limits. Yet, although bank
personnel might confirm that a check has "cleared" locally, that does
not necessarily mean that the funds have been fully reconciled.
MORAL OF THE STORY: Never return any escrow funds until you
are certain that the funds have actually "cleared."
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