Introducing the Latest Scam: Overpayment to Contractors

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

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.

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Rainmaker
1,492,715
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Chris Ann, I'm just amazed how much trouble people would go through to scam others. I haven't heart this one thus far, thanks for sharing.

Jan 27, 2016 11:09 AM #3
Rainmaker
576,790
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

They invent a new scam every minute, it seems. Love what Candice A. Donofrio said!

Jan 27, 2016 11:09 AM #4
Rainmaker
1,675,919
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

My new love lately is the show American Greed. Needless to say it draws you right in...

Jan 27, 2016 11:31 AM #5
Rainmaker
1,577,724
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Thanks for the heads up Chris Ann Cleland this is a new one on me.

Jan 27, 2016 11:39 AM #6
Rainmaker
797,359
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Chris Ann - It never ceases that these crooks always cook up something new, or at least a new twist on something. Like others have said, these scammers are so creative, they could probably make legit money using that creativity for good.

Jan 27, 2016 01:42 PM #7
Rainmaker
3,186,030
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Chris Ann that was a new one on me, they are so creative but stupid at the same time...Endre

Jan 27, 2016 04:17 PM #8
Rainer
52,546
ANTHONY DI IORIO
North Jersey Property Inspections, Inc - Saddle Brook, NJ

Most people would suspect something was up.  Who has extra cash around to pay for someone elses stuff like movers especially?  Heck, I use my debit card to buy coffee!  But there most be a lot of very trusting folks out there or else the scam wouldn't be worth persuing.  Thanks for the heads up!  

Jan 27, 2016 06:47 PM #9
Rainmaker
2,957,136
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Thank you for the heads up, i always talk to my sellers about diferent scams and this one will be added to the list. I did have a seller who got taken in a yard seller taking a check for big tickets items. Have a good Thursday Chris Ann Cleland 

Jan 27, 2016 10:10 PM #10
Rainmaker
3,267,795
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Chris Ann -- the first thought that came to my mind is the same as the one provided by Endre Barath, Jr. --- creative yet so stupid.   I'm sure this scam goes far beyond the Bristow VA city limits.  

Jan 27, 2016 11:56 PM #11
Rainmaker
49,131
Lana Mosley
Keller Williams Realty Services - Hammond, LA
Building my empire one listing at a time.

Wow! I knew about scammers "renting" properties for sale or lease, but I had no idea they were doing this.  Thanks for letting us know!

Jan 28, 2016 12:32 AM #12
Rainmaker
2,772,120
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Chris Ann, I get calls similar to this only it is the "contractor" calling asking is I need any work done ... they are in the area ...can stop by to give an estimate.  The first time this happened I advised the caller that I am a real estate broker ... and he hung up.

Jan 28, 2016 01:31 AM #13
Ambassador
3,802,472
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Chris Ann- You have to wonder why people like this don't take all of that creative energy and focus it towards something legitimate. 

Jan 28, 2016 06:49 AM #14
Rainmaker
506,030
Ellen Caruso
Daniel Gale Sotheby's International Realty - Glen Head, NY

Its such a shame there is so much scam. I tell my kids and friends to stay off of craigs List.

Jan 28, 2016 07:04 AM #15
Rainmaker
3,978,839
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I gues the school of hard knocks in my early years has me seeing red flags really early nowdays

Jan 28, 2016 08:50 AM #16
Rainmaker
2,189,507
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

What's really scary is most people have no idea how a mechanic's lien is paid so they would fall for this. But they tend to fall for all kinds of scams because they believe people would not cheat them.

Jan 28, 2016 10:49 AM #17
Rainmaker
1,468,213
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Oh the sneaky bastards! And the concrete scenario... Don't even go there!

Jan 28, 2016 05:31 PM #18
Rainmaker
1,179,784
Curtis Van Carter
Better Homes & Gardens Wine Country Group - Yountville, CA
Your Napa Valley Broker Extraordinaire

Chris Ann

First time I have ever heard it being done to contractors. Any more, if anyone asks for money back your fraud antennas better be going up. good post, cheers cvc

Jan 28, 2016 11:33 PM #19
Rainmaker
2,099,696
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Damn. One more thing to worry about. I can't imagine a contractor doing a job without actually meeting the "owner" at the property. Seems like the smart thing to do.

Jan 29, 2016 01:33 AM #20
Ambassador
3,935,688
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Chris Ann Cleland 

Jeez, yet another scam to watch out for. Good thing the contractor did go ahead and start working on that driveway. It's too bad the scammers can't put their talents, such as they might be, to good use.

Jeff

Jan 29, 2016 08:32 AM #21
Rainer
319,132
Peg Barcelo
Fluff My House! Home Staging Inc. 250.486.6369 - Summerland, BC
The FlufftasticStager from Summerland, BC

That is unreal Chris Ann.

It never ceases to amze me the lengths crooks will go to to earn money.

Imagine if they put that effort into doing something legitimate...

I don't get how these people think...

Feb 06, 2016 04:39 AM #22
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Chris Ann Cleland

Associate Broker, Bristow, VA
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