Beware of the Land Troll – Is buying land a scam?

“Is this a Scam?”

“How do I know that you’re the real owner?”

“How come there’s a different owner on record”?

I get these questions a lot and rightfully so. After all, there’s a lot of scams out there and you just don’t know what you’ll run into.  Well, in today’s post, I show you what the deal is with these parcels of land I have, how I sell them, and how to avoid any scams.

My inspiration today is brought to you by…

The Jealous Land Troll…

… Another land seller who likes to call other sellers a scam-artist on their ads.

I’m sure he’s a fine gentleman, but when it comes to selling land in his “territory”, he turns into the “land police”, only to wait under the bridge for someone’s ads to pop up, then springs on them to tear them apart in the comments.

But it’s no trouble for these land sellers, because I’ll tell you exactly why he calls them a “scam artist” and if you’re asking, “is buying land a scam”, I can clear that up for you with a few things to look for to avoid being scammed.

“You’re not the Owner!”

This is a common statement from the troll. The reason why he’s saying that, is because for some lots from professional land sellers, they start marketing right after they give a check to the seller to purchase the land.

However, this approach (which is done by almost every modern-day land flipper), means that it will take 3-6 weeks for the deed to be recorded by the county; it takes about that long for a mailed-in Notary to be recorded. So that explains why, often, land sellers like doesn’t show on record yet… because as soon as they have a signed deed, they market it.

“But what if the seller sells it to someone else?”

That’s a possibility.

So, you’re saying that after I buy it, the seller can turn around and sell it again to someone else? Well, that CAN happen. After all, the county just records any legal deed that comes from the original seller. So, if two deeds from the same seller but two different buyers, get to the County at roughly the same time… county will record both. And it will be a whole mess to clean up.

But among the community of land investors in the US, it’s unheard of. Not only is it unheard of … but the seller just committed real estate fraud by selling a property twice. Those are big lawsuits towards the seller.

So how does a land flipper like me avoid this?

Well, for one… most land investors are very good at checking the chain of title and verifying current ownership BEFORE paying a check to the seller. After all, we don’t want to get stuck with a bad property ourselves.

Second… they send a signed deed immediately to County for recording.

Thirdly… most guaranty a clean title. And they will refund your money IF (and that’s a big IF with vacant land), there’s something wrong with a title that can’t be fixed.

“This is not legal!”

The Jealous Troll likes to pose as a real estate attorney to try and destroy other attempts of land sellers to make a living. And this is a common statement he’ll blurt out… that it’s illegal for anyone to market a property (or a contract) without having the deed recorded even though someone paid the seller.

It bothers him so much, that he spends hours under the bridge waiting for any helpless land seller to walk under it only to pounce on him like a car accident, neck injury attorney.

Well, first off, CA real estate attorneys have said, that you CAN market and SELL a real estate contract without being an agent or buying the property. 

But, don’t let that confuse you, because what land sellers do is much more than selling a contract. They actually already paid for the property. So according to real estate law, the signed and notarized deed from the seller is an official transfer of ownership.

So, that’s your first step to avoid being scammed when buying land…

1. Does the proposed seller, at least have a signed deed? If not, you may want to turn the other way.

2. If the property does not show yet on the County Assessor Site, OR the Recorder (you can always call the County where the property is located and ask who is on record), they have to have a notarized and signed deed with their name or company as the owner. A signed and notarized deed is an official transfer of ownership.

If they have the Deed, then you are good to go to purchase, especially if it’s from a Professional Land Seller who has a respectable business to run.

3. If that still makes you uncomfortable, and you’d like to wait until the deed shows on the County website, that’s ok too, and it’s an extra layer to protect yourself.

4. The absolute best way to protect yourself is to go through escrow and that’s where you can also pay for title insurance. However, most small inexpensive lots don’t go through escrow. It’s expensive and takes a very long time. So, don’t be surprised if a professional land seller says, “No.” to going through escrow. They’ve been doing it long enough to where they know how to verify ownership and go through a smooth and safe transaction themselves. To them, and most buyers, it’s not worth the heavy costs and long wait times of escrow.

A recap

There you have… the inside job of a land seller. Don’t let the Jealous Land Troll scare you. A professional land seller (if he has a reputable business) will:

  1. Purchase the property from the original seller with a signed notarized deed
  2. A notarized deed is considered a transfer
  3. Most modern-day land sellers market the property as soon as they have a notarized deed.
  4. Most of the reputable one’s guaranty a clean title transfer
  5. There are steps you can do to verify that you are safely buying land.

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