WASHINGTON — At first glance, a three-bedroom, three-bathroom house in southeast D.C. for $36,000 seems like a steal. One might see this as a first-time buyers dream, but beware: It's a scam.
Scott Frost, a local real estate agent with Coldwell Banker, was listed as a contact agent for the property after he paid Zillow for advertisement. He told WUSA9 he researched the property, and determined it was a fraudulent listing.
"I can tell you that the listing is a scam," Frost said. "I looked up the tax records, and the name of the owner was the same, but I also looked up the last listing agent whose photos were used in the advertisement. I reached out to them, and that's how they confirmed that those photos were used illegally, and that it's a scam."
The contact information provided in the body of the advertisement lists only a last name and a phone number. Frost has received five calls in less than 12 hours about this property, and has warned each interested buyer that the home for sale is a fake listing.
"I warn them that when something appears to be too good, it almost always is," Frost said. "I also explain the logistics of the offer as it's presented in the ad don't make sense. If I've received five calls in less that 12 hours, that means they've received probably much more and there's no way to determine which of the many interested parties that would apply for that house would be the ones that get it. It opens them up to all sorts of logistical problems. I think it's just meant to solicit people's information."
The Zillow ad specifies that the property is available for first-time buyers only: "no lenders, no investors, no wholesalers, no attorneys and no one that has ever owned a property."
According to the Zillow listing, the owners have property across the country, and once a year they "sell one or a few of our homes to first-time buyers for under $50,000."
The fraudulent listing also states the home is occupied by tenants until April 21, and due to their lease, 48 hours notice must be given before an interested buyer can see the property.
But before the 48 hours notice is given to the current tenants, 20 percent of the asking price -- "hard cash" -- must be deposited into the owner's independent escrow agent's bank account within an hour-and-a-half of their initial contact with the property agent.
Frost said that this process isn't typical in real estate practices.
"The ad's process to move forward skipped a title company that would traditionally hold an escrow account and be subject to many laws that protect consumers' money," Frost said. "Usually the title company is selected by the buyer, and the fact that they're circumventing that to get the cash under their legal control is an enormous red flag."
According to Frost, this type of scam is common in real estate.
"Zillow, Trulia have gotten better at this," Frost said. "This was a bigger problem in the past, but it's not super uncommon to have our real estate photos taken and used for listings that end up being scams."
But would Frost recommended a potential buyer to deposit 20 percent of the asking price into an independent escrow agent's bank account before seeing the property?
"Absolutely not," Frost said.
