Real Estate Websites Targeted in Scam, Hits Bay Area

By Stephanie Chuang
|  Wednesday, Aug 28, 2013  |  Updated 11:40 PM PDT
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Popular real estate websites are targeted in an elaborate fraud hitting the Bay Area. Stephanie Chuang reports.

Popular real estate websites are targeted in an elaborate fraud hitting the Bay Area. Stephanie Chuang reports.

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When Cathy Vargas showed up at a single family home in San Jose, she was expecting to meet the listing agent linked to the posting she saw on Trulia.com. She waited, but no one showed up, so she called the number on the real estate sign on the lawn.

The real listing agent, Edwin Resuello, informed her she had been the victim of a scam – the house she thought was for rent for $1,200 a month was actually worth more than double that. And it wasn’t for rent, just for sale. Resuello said he got a number of calls from people looking to rent, all frustrated when he told them it was a fake listing.

“I let her know that’s a scam,” Resuello said. “It was at that point I sent a note to the MLS and let them know this is happening in our own backyard, and what are we going to do about it?”

In Vargas’ case, the so-called agent was named Brian J. Martin. He had only corresponded using email, signing off with the following, “I await your urgent reply, TXT ONLY Brian J Martin.” Her husband was the first to notice something wasn’t right.

“When I read it in the beginning, I didn’t notice anything,” Vargas recalled. “I guess I was excited about wanting to find this house and then when my husband read it, he said, ‘This is strange, his grammar’s not right.’”

That would be the first red flag of many. In his emails, the man said he was in Indiana for work and could not show her the property in person.

“I want you to drive by the property to view from outside so we can move to next step on how you will get the entrance keys and all the paper work,” he writes in one email dated August 8.

“Everything he said is by phone, he would mail me the keys, he wouldn’t come because he’s out of town,” Vargas said.

What was he asking for? Deposit money. Though Vargas said she’d never send money, it turned out there was something else this scam artist was looking for: her personal information. He asked her to fill out forms. Resuello said that’s common, forms for credit score checks and rental applications.

“Before getting to the property, everyone fills out rental applications,” Resuello explained. “Rental applications not only ask for names, they ask for social security numbers, bank reference numbers, driver license numbers. How easy would it be to steal someone’s identity?”

Jim Harrison, president and CEO of MLSListings, said the scam isn’t new, but it is more frequent. “We’re starting to hear more and more that people are being scammed.”

Scammers copying listings, word for word, also stealing the pictures, and reposting the real estate listing as their own. He said they oftentimes ask the victims to mail deposit money before they even set foot on the property. That has been a scam for a few years, but filling out the form for personal information is a newer twist.

“Make sure when you fill out a form, you know exactly where it’s going,” said Harrison.

Especially with these postings popping up on trusted real estate sites like Trulia, Zillow, and HotPads.

“One of the things they’ve done really well is started really good rental listing services,” said Harrison. “The problem is, they’ll take a listing from anybody.”

Pierre Calzadilla, a Trulia rental spokesperson, said the website launched its rental division in Spring 2010 and has been working on fraud prevention measures ever since. Calzadilla added the company dedicated both a team of people and an algorithm to detect fraudulent postings and remove them, also verifying those who are posting on the site are using U.S. numbers and U.S. IP addresses.

Cynthia Nowak, a spokesperson for Zillow, said the company has similar measures in place for both its website and for HotPads.com, a rental and real estate search site Zillow acquired last Fall.

“Because internet scams are unfortunately a reality in today’s world and particularly with well-known consumer brands, HotPads and Zillow go to great lengths to police activity and fully inform our users of the existence of scams and how to protect themselves,” Nowak wrote in an email statement.

The company also features a “report listing” button for suspicious postings, which Nowak said would be taken down if proven to be a scam.

Neither company provided the number for how many fraudulent postings there have been on their respective sites. Calzadilla said that was to deter scammers from even trying.

Both Resuello and Harrison said that it’s more buyer beware than before in the Bay Area where the real estate market is hot. Demand is high while supply remains very low. Harrison estimated there are 4,000 available listings when the usual number is more around 18,000.

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