Seller Impersonation Fraud: Illegal Sales of Commercial & Residential Properties

Seller impersonation fraud has rapidly become one of the most alarming forms of real estate crime in the United States, targeting both commercial and residential property transactions. The practice generally involves a criminal posing as a legitimate property owner, using falsified identification documents and forged credentials to illegally transfer ownership to unsuspecting buyers. Ultimately, fraudsters steal the sale proceeds, leaving both the buyer and the rightful owner in legal and financial chaos. These schemes often involve “impersonating the actual owner and recording fake or forged documents in local land records,” resulting in equity loss, property theft, and costly litigation for victims.

Fraudsters target vacant lots, rental units, investment properties, and properties where the true owner does not reside, meaning the real owner may not discover the transfer for months or even years. In many cases, criminals steal Social Security numbers, driver’s license data, and tax records, and even leverage forged or misused notary credentials to appear authentic during transactions. This often occurs without the actual notary’s knowledge, as shown in the official ALTA fraud briefing.

With this increasingly sophisticated threat on the rise, consumers, real estate professionals, escrow agents, and title insurers need a deeper understanding of how impersonation fraud works, how to detect it early, and what protections can help mitigate exposure.

How to Recognize Seller Impersonation Fraud

Fraud attempts frequently present recognizable patterns. Detailed warning signs should trigger heightened scrutiny or an immediate halt to a pending real estate transaction. These red-flag indicators include:

• The property is vacant or rented, rather than owner-occupied

• The seller insists on a quick sale (often under three weeks)

• The property is listed below market value, sometimes substantially so

• The seller refuses to meet in person or claims to be out of the country

• The seller only communicates via email or text, avoiding voice or video interaction

• The seller demands that the proceeds be wired instead of accepting a check

Another key indicator is resistance to authentication questions. For example, a legitimate seller should be able to confirm personal data and answer basic property-related questions correctly, and that mismatched physical ID characteristics, altered lamination, or inconsistent signatures may signal fraudulent identification documents.

As the Be a Savvy Consumer handout emphasizes, if a real estate deal “sounds too good to be true, it very well might be,” and consumers should always ask questions and slow the transaction if anything seems unusual.

How Title Professionals and Buyers Combat Seller Impersonation Fraud

Preventing seller impersonation fraud requires rigorous identity verification procedures throughout the transaction. Real estate professionals, escrow officers, and notaries must follow stricter best-practice protocols that go beyond surface-level review of seller-presented documents.

There are multiple strategies for mitigation, including:

• Contacting the seller via an independently verified phone number, not one supplied by the seller

• Using third-party identity-verification services that analyze credentials, phone numbers, and email metadata

• Comparing the seller’s signature with historically recorded documents

• Checking tax mailing addresses for discrepancies

• Signing up property owners for free county document-recording alerts, where available

In addition, notaries play a pivotal role in fraud detection. The State ID Verification Tips resource outlines procedures such as inspecting the ID’s microprinting using magnification, checking UV-activated holograms, and physically handling the card to detect alterations or fake lamination. These steps help identify forged identity documents that fraudsters frequently employ.

Critically, title insurance remains a consumer’s strongest legal and financial defense. Both the ALTA Owner’s Policy and ALTA Homeowner’s Policy offer protection against forged signatures and fraudulent deed transfers occurring before a purchase, while the ALTA Homeowner’s Policy specifically extends coverage for fraud that occurs after purchase, enabling coverage when a criminal later transfers a property the owner already owns.

Protecting Property Rights and Working With Trusted Title Professionals

Seller impersonation fraud is not only a financial crime; it is a direct attack on property ownership rights. The harm impacts buyers, sellers, and the credibility of the entire real estate system. The documented rise in deed-fraud cases across the nation underscores the importance of remaining vigilant, asking questions, and slowing the process when information or identity verification does not align.

Education, technology-supported verification, and strong title insurance protection work together to safeguard stakeholders during high-risk transactions. If you are a homeowner, investor, or commercial real estate participant in the Chicagoland area, now is the time to confirm that you are protected — not just at closing, but for the lifetime of your property ownership.

If you have concerns about property title security, require professional verification, or are preparing for a property sale or purchase, contact the Chicagoland title insurance and escrow team at Plymouth Title Guaranty Corporation.