Introducing the Latest Scam: Overpayment to Contractors
Last week I received a phone call from a local contractor. She was very concerned that my listing was being scammed. Hmmm. That gets your attention.
Her story unfolded about a person claiming to be the new owner of the home calling her and wanting a quote ASAP on installing a concrete driveway. She went to the property, never knocked on the door, and called the gentleman back with a quote. He wanted it done ASAP. For some reason or another, the contractor had to go out yet again to double check the quote. Again, didn't knock on the door.
Her clue that this may be a scam was when the "new owner" told her that he needed to overpay her for the job because there was a lien left on the home from when he purchased it and he needed cash to pay it off. They weren't accepting credit payment, like she was.
It's the Craigslist scam. Put something up for sale on Craigslist like furniture and someone shows up to buy it. They go to their check book and, darn it, it's their last check. They are so embarassed, but they need to ask if they can write it for the amount they owe their movers, who are moving them into their apartment right now. You give them cash, and their check bounces.
This particular scam with the property is concerning because this contractor didn't seem to think they had done anything wrong in not their verifying the lead. The contractor knew the tax records wouldn't be updated with an owner who purchased in the last month or two. And she never thought to get a settlement statement that was notarized. Heck, the water company requires that to start up service for a new home owner. So you can't necessarily rely on contractors to weed out the scammers.
Had this contractor done the concrete job, I asked a local title attorney if the title insurance to the property would cover a mechanic's lien from the fraudulent activity. Inevitably, the payment wouldn't go through once the overpayment had been received and the contract could put a lien on the home. The attorney said from a strict mechanic's lien perspective, no. Apparently that only covers mechanic's liens for work ordered prior to purchasing the property for your own use. From a fraud standpoint, unless the person claiming to be the owner was pretending to be the actual owners, say Mr. & Mrs. Smith, instead of using a totally fake name, fraud coverage probably wouldn't cover it either.
What's a home owner to do? If someone is checking out your property, go out and talk to them. They may also have no clue they aren't actually talking to the real home owner. Set up security cameras to capture images of folks coming and going on your property and review it daily.
Listing Agents, let your sellers know about this scam. I am positive
that Bristow, VA is not the only place this is happening.