When AI Steals a House: Why Knowing Who You’re Dealing With Could Save Your Deal

by Don & Susie Karstedt

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In 2024, scammers nearly sold Graceland, Elvis Presley’s iconic Memphis estate, out from under his family using a forged deed and a fake loan. That same summer, the $165 million Spelling Manor in Los Angeles was thrust into a surreal legal battle after a couple filed a claim using a falsified deed, insisting the mansion was “rightfully theirs.”

These aren't Netflix scripts. They’re real fraud attempts playing out in courthouses, headlines—and increasingly, in everyday real estate transactions across the U.S.

Here’s what’s changed: artificial intelligence.

How AI Is Fueling a Dangerous New Kind of Real Estate Scam

Fraudsters used to need access to hard copies, real paperwork, or in-person deception. Not anymore.

Now, AI tools can generate hyper-realistic fake IDs, forged signatures, counterfeit notary stamps, and even deepfake videos that impersonate buyers or sellers during virtual closings. In one recent title company case, a woman joined a Zoom call to “prove” she was the seller—only she wasn’t moving, blinking normally, or speaking. Her face looked real… too real. Turns out, it was likely a deepfake using the photo of a missing woman from a flyer in California.

Think about that: scammers are lifting real human faces—people who are missing or deceased—and using them to digitally impersonate property owners.

 

These Scams Aren’t Targeting Mansions Anymore

Yes, multimillion-dollar properties like Graceland and Spelling Manor make headlines. But the tools used to attempt those heists are also being tested on everyday homes.

In fact, vacant properties and land parcels are now a prime target. Why?
Because no one's watching them. Owners might be out of state, or passed away without clear succession plans.

A scammer forges a deed, files it with the county, and either:

  • Sells the home to an unsuspecting buyer

  • Takes out loans against the property

  • Rents it out to tenants who don’t know they’re not dealing with the real owner

By the time anyone realizes what's happened, the money’s long gone and the rightful owner has to fight to reclaim title—sometimes at their own expense.

     
     
     
     
     
     
     
     
     
     
     
     
Why This Matters to Our Clients

We work with a lot of buyers purchasing second homes, inherited homes, or homes from out-of-area sellers. In cases like these, verifying the identity of the other party is no longer just a good idea—it’s a safeguard against a deal collapsing.

Here’s what can happen when you don’t know who’s on the other end:

  • Lenders delay or deny funding due to suspicious title activity

  • Title companies refuse to insure a transaction they can’t verify

  • Buyers lose earnest money or face eviction if they buy from a fraudulent seller

  • Sellers risk lawsuits or massive clean-up costs if their property is sold without their knowledge.

 

 

What You Can Do to Protect Yourself

Here are the steps we take—and that you can take too—to make sure the person on the other side of the table is real, and the deal is legitimate:

✅ Educate Yourself So You Know When to Question

When we begin working with a new client—especially buyers—we make it a point to educate them early on about the wire transfer process. As closing approaches, they’ll be required to send a substantial amount of money to the escrow company, and it’s critical that they know how to do it safely.

Recently, one of our clients reached out with a concern.
She said, “You mentioned that I’d be asked to wire funds, and I just got a request—but something about it doesn’t feel right.”

She had the foresight to call us before taking action. We reviewed the request together and immediately noticed red flags. The wire instructions appeared to come from the lender—but a direct phone call revealed their email system had been compromised. The request was a fraud attempt.

Because we had discussed wire fraud from day one, our client was alert and took the right steps. Her funds were protected and successfully sent to the legitimate escrow company. She’s now set to close next week, right on schedule.

It’s a powerful reminder: awareness is protection.
A short conversation upfront can prevent a devastating financial loss.

✅ Scrutinize Communication Styles

Fraudsters often push for urgency, all-cash offers, and limited documentation.
Be cautious of anyone who avoids phone calls, insists on email-only communication, or pressures you to act quickly.

✅ Verify the Chain of Title

When it comes to selling real estate, proving you have the legal authority to do so is not optional—it’s essential.

That’s why we always double-check recorded deeds, tax records, and past sales activity before moving forward. If names don’t match up or there’s a recent title transfer that raises questions, we dig deeper. It’s part of protecting our clients and ensuring a smooth, fraud-free transaction.

You may notice that everyone from real estate agents to escrow officers is asking to verify your identity. There’s a reason for that: all parties involved need to be confident that you have the right to sell the property. This is especially important if you’re acting as a trustee, guardian, or selling on behalf of someone else. In those cases, you’ll need to provide documentation—legal papers that confirm your authority to represent the owner.

Bottom line: selling a home isn’t just about signing on the dotted line. It’s about showing you’re the right person to do it. We’re here to help make sure that part is clear from day one.

✅ Recommend Title Insurance

Title insurance isn’t just a box to check—it’s a safety net.
It protects you financially if someone later challenges your ownership due to forged documents, clerical errors, or undisclosed claims.

✅ Ask Who Holds the Mortgage

Ironically, having a mortgage can help deter fraud. A scammer would need to fool both the homeowner and the lender to transfer title.
If a home is owned free and clear, it's more vulnerable. In fact, some property owners proactively record a mortgage to themselves to block unauthorized sales.

Final Thoughts: Know Who You’re Dealing With

In a world where AI can fake a face, forge a deed, and fool a notary, your transaction is only as safe as your safeguards.

As real estate professionals, we verify ownership, confirm identities, and guide our clients through each step of the process—because today, due diligence is more than best practice, it’s a necessity.

Fraud isn’t some distant threat. It’s sophisticated, tech-powered, and increasingly present in every market.
If you're buying, selling, or transferring property—even within your family—let’s talk. We’ll help make sure the person you're dealing with is exactly who they say they are.

 

Susie

 

💡 Curious about more homeownership tips? Follow us at Rethinking Real Estate for insights and advice that keeps you informed!

We have more blog posts at

https://rethinkingre.com/blog

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https://youtube.com/@rethinkingre

There is even a podcast at https://rethinkingre.com/podcast

 

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