When They Tell You It's Urgent

This article recounts a real estate scam. I describe it here because it is new, at least to me, and because this is one of the ways people will try to steal your money. The story starts a visit I got from someone older than I. Those of you who know me realize that is a rapidly declining sliver of the population. This man owned some property, was reasonably well-informed about what he owned, and disastrously un-informed about his computer. Again, I identify.

This man owned a Florida time-share condominium that he had bought years ago, desired to sell, but had made no effort to find a Buyer. Out of the blue he got an unsolicited phone call from a person who said he was a real estate agent in another state. The Agent told him that he had a person located in Mexico who wanted to buy the unit. The Agent sent a contract naming the Buyer, together with the name of a closing agent, located in yet another state. All three points of contact submitted their own contracts to the Florida owner, and the deal looked typical and legitimate. All three contracts required litigation or arbitration in the event of dispute to be conducted in the home state of the Agent, the Buyer, and the Closing Agent, not in Florida.

After his contract for sale was signed the Owner was told that Mexico required closing costs to be paid in advance. Those closing costs started out to be about $4,000.00 and in several installments rose to more than $10,000.00. The explanation given was that Mexican buyers cannot pay closing costs out of the contract closing, they must be paid up front, but would be repaid at closing.

After several wire transfers to Mexico, the Florida owner became suspicious and refused to make more payments. Within several hours he received another call, this one also unsolicited, from California, advising that he had been scammed. For a payment of $5,000.00 that fourth firm would help him get the previous money returned and presumably return the money paid to the “collector.” In exchange for payment to them the latest player said they attempted, but failed, to recall the wire transfer. They needed more money to go further.

Most of these communications occurred over the internet, some by phone. All were “verified” to the extent an internet search could confirm through websites that these parties actually existed. This owner, who could be your mom and dad or mine, has now wire transferred about $15,000.00, most to Mexico, and the chances of getting any of it back are slim.

It’s easy to assume that not one of us really smart people would fall victim to the ploy I’ve outlined here. Not so fast. These people happened on someone who needed to sell, and probably, after the initial mistake, was confused and embarrassed. Past mistakes are sometimes so easy to see they look ridiculous. But now several lessons are apparent: First, unsolicited contacts offering you an unexpected benefit are probably a scam. Second, if you are the seller, don’t send money, especially by wire transfer, to pay closing costs. Third, generally, don’t close real estate through a closing or real estate agent outside the state. Finally, and most important, when you get confused or suspicious, just stop. Do nothing.

There are plenty of people locally who will help you. Please don’t be reluctant to stop and seek help. Any real estate deal done urgently has a high probability of mistake, or just plain fraud.