LOCAL NEWS

Utah Dept. of Commerce: Be aware of vacant land scams in the state

Dec 7, 2022, 11:11 AM | Updated: 7:35 pm

SALT LAKE CITY — The Utah Department of Commerce’s Division of Real Estate is urging land buyers and owners to be aware of a scam involving vacant lots and land parcels.

The division said in a press release Wednesday that they have been notified of at least 10 different instances of this scam, adding that they suspect others have occurred.

The scam often involves vacant land that is listed by someone impersonating the owner on third party property sites like Zillow and others. They are often found at prices below market value as For Sale by Owner, according to the release.

“I am aware of two closed transactions and potentially dozens of attempts,” said Jonathan Stewart, director of the Utah Division of Real Estate.

Department of Commerce Executive Director Margaret Busse said these kinds of scams are harmful because they erode trust in the real estate market.

“But this scam shouldn’t deter anyone. It means buyers need to be extra careful with this particular type of listing,” Busse said.

The division said the scammers typically present themselves as out of state and communicate exclusively via email or text. They also push for a quick close, including the use of a remote notary and title service.

Jonathan Stewart said, “Vacant lot or land parcel listings are an easier target for scammers because often there’s little reason to physically visit the property. Without a building or home to walk through, scammers can post photos and more easily pretend to be the seller.”

To avoid this type of scam, the department recommends watching for the following red flags:

  • The Listing involves vacant land (in rare circumstances, vacant condos)
  • The seller is not in Utah and may claim to be out of the country
  • The seller will only sign documents remotely and will not have someone meet locally
  • The seller won’t provide detailed information about the property.
    • Typically they are not able to provide information about Club Memberships, HOA dues, HOA transfer fees, utility charges, water rights, water shares, etc.
  • The vacant land is being listed for well below market value
  • The seller is in a big hurry to close
  • A seller acts aggressively or aloof

Agents have also been encouraged by the division to take extra precautions to avoid this scam.

“If you are contacted about selling vacant land or if you are representing a buyer who is looking at vacant land, please do your due diligence and be certain the sellers actually own the property.”

Those steps include:

  • Research the name of the seller and check their photo ID
  • Take additional steps to identify ownership of the land
  • Ask specific questions about the property details

Real estate attorney Shane Norris said the scam listings starting popping up a few months ago and culminated with a transaction.

“A fake seller had sold this property to a buyer and the transaction had actually closed and so we were shocked to hear that,” Norris said.

Norris, who is general counsel at Summit Sotheby’s International Realty, said this is a scary type of fraud. He’s now spreading the word and learning that Utah isn’t alone.

“Then we heard one had closed in Hawaii, one had closed in Colorado,” he said. “This is everywhere and I think this is the tip of the iceberg on this new type of fraud.”

In the case of that closed transaction that Norris is aware of in Summit County he said the buyer did have title insurance.

“It was between $750,000 and $800,000 so this was not a small transaction,” he said. “This was a significant amount of money.”

Summit County is encouraging residents to protect their property with a fraud guard that’s available from the recorder’s office. It can give people an early warning of property fraud.

If a listing of this nature is found, the department says you should report it to the listing site or the brokerage. Reports can also be made to the Division of Real State on the website.

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Utah Dept. of Commerce: Be aware of vacant land scams in the state