When the girls of TLC came out with their hit song, “No Scrubs” back in 1999, most of us probably never would have thought that the song would find its way into the world of real estate some 24 years later. Or, at least, I am placing it there! You see, it does not really matter if you have been in the (real estate) business since 1999 or you have only been in the business the past 1999 hours, I am pretty sure you have heard the “hype” about fraudulent sellers or, scrubs who, for this blog post’s sake, shall mean someone trying to sell property that they know they do not own.
In an age where so many real estate documents can be and are signed electronically, it has opened the door wide open for opportunistic “scrubs” to walk right in and try to sell property (that isn’t theirs) and walk off into the proverbial sunset with the proceeds of said sale. In this digital age, owners or sellers of property do not have to be in your presence to sign listing agreements and contracts, sellers can sign deeds with a notary (basically) anywhere in the world, and in many instances a listing agent may never even see their seller/client in person during the whole transaction, contract to close! The realm of “scrub” possibilities are seemingly endless!
Let’s look at a hypothetical: Mr. Chilli reaches out to Ms. Lopes purporting to be the owner of 123 Left Eye Lane and asks about her assistance in listing and selling the Property. Mr. Chilli and Ms. Lopes have a lengthy conversation about the Property and what Mr. Chilli ultimately wishes to accomplish with the transaction… to sell and make money. The Property is vacant land, so Ms Lopes does not think much of needing Mr. Chilli to be in person for any part of the transaction. Ms. Lopes quickly pulls the deed to the property, checks out the tax card, runs the comparables, and ultimately sends all of the necessary paperwork over to Mr. Chilli to sign via Docusign. The house is listed, goes under contract with unsuspecting buyers, and everyone proceeds toward closing. A week before closing, Ms. Lopes gets a strange phone call from a guy also by the name of Mr. Chilli who claims to be the owner of 123 Left Eye Lane and would like to know why she has his land listed for sale. After some due diligence (pun intended), Ms. Lopes quickly realizes that her “client” was not who he said he was and the whole listing was a scam!!! Luckily in this hypothetical, the closing never went through, there was no due diligence given in the transaction, and the proceeds of a fraudulent sale were never handed over to the Mr. Chilli who was actually Mr. Scrub! YIKES!
The North Carolina Real Estate Commission (“NCREC”) has made recommendations about how to avoid the same or similar situations like the hypothetical one above, such as asking for a copy of the seller’s ID, checking the history of the property, and reaching out to a previous listing agent or agents to verify if applicable. While these are great recommendations, they are not requirements, and you can and should do MORE to protect yourself in these situations!
Most of us like to believe that the majority of people are good, at least I hope so! While we can still believe in good people and the good IN people, when it comes to something as big an investment as real property, we must make it a priority to treat each potential seller with the utmost caution by double and triple checking that who we are dealing with is actually the owner of a property. Absolutely get a copy of the ID but take it two steps further: have them jump on a zoom call with you while holding the ID that you got a copy of, if they are relatively close geographically, demand they meet you in person at some point during the listing process – meet them halfway if necessary, search the person online or on social media platforms, search for related phone numbers and try calling those, and for the love of scrubs, trust your gut! It might seem like overkill, but taking these extra steps can save you stress, your real estate license, and a whole lot of money! Oh, and it can actually help prevent a fraudulent sale of real property!
Be vigilant, my friends, so that you don’t end up in an even worse situation than our hypothetical listing agent, Ms. Lopes! Reach out to a trusted colleague if you feel like you might be getting “scrubbed” or seek the advice of your favorite closing attorney if you suspect something isn’t right, we are always happy to help!
So, when you get a lead for a listing and that “seller” cannot prove to be who they say they are, you can REST EASY having done your due diligence and remember what TLC said to all of us back in 1999… “No, [you] don’t want to meet [them] nowhere and No, [you] don’t want none of [their] time.”