Episode 57: Safeguard Clients & Closings with Due Diligence | Guest Kelly Frisch
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Welcome to the REALTORS® Land Institute Podcast, the Voice of land, the industry's leading land real estate organization.
Justin Osborn: This is Justin Osborn, accredited land consultant with the Wells Group in Durango, Colorado. On today's episode of the Voices of Land podcast, we're talking with Kelly Frisch. Kelly started with United Country Real Estate as an office manager in 2011. She enjoyed the fast-paced, high-demand atmosphere so much that she got a real estate license in the fall of 2020. By 2022, she had purchased two offices, adding a third in 2025, located in the Northeast Minnesota section about 100 miles north of the Twin Cities. Half of her business is focused on residential, while the other half is focused on recreational and hunting properties. Kelly joined RLI in 2022 and is currently serving as president of the RLI Upper Midwest Chapter. Welcome to the podcast, Kelly.
Kelly Frisch: Thank you for having me.
JO: Well, you got in at an interesting time, getting in 2020 and 2022. It's definitely an interesting time to get in real estate, and it's a little bit different than what we're seeing today.
KF: Yes, it is. I had really enjoyed the work that I was doing kind of on the back end of real estate, and I wasn't really working with people as much. I was working with my agents, obviously, but I kind of missed working with customers. So it was kind of a good transition for me to go from the admin side and take what I had already been doing and knew and be able to add the customer side into it as well.
JO: Well, that's neat, and I love your area. Where I'm at, it's kind of the arid southwest, and you and I met a few years ago when your chapter flew me up to Minnesota and taught the transitional land class, and man, it was so cool flying in and seeing just water everywhere. I mean, out here our saying is whiskey's for drinking and water's for fighting over because we don't have hardly any, and then I look out where you're at, and there's just so much water. It was so cool to see.
KF: Yeah, definitely the land of 10,000 lakes, no shortage of water wherever you are in Minnesota.
JO: Well, let's talk about due diligence today. So important that our agents understand this and that we're looking after our client's best interest, and so I'd like to kind of start by talking about some of the scams that you're seeing in the industry right now.
KF: Yeah, so I had done a presentation on this, and kind of the biggest things that we are seeing, there's three major scams that are kind of prevalent in real estate, the first one being wire fraud, which I think at this point everybody is aware of and knows about wire fraud. Basically the scammer gets a hold of wiring instructions when you're going to go to close on a house, and you wire the money for your closing, and they are able to intercept it, and you go to closing the next day, and your money is not there. So I think that's kind of the most prevalent one that everybody is aware of and knows about. The other two that are becoming more common, the one that we're seeing a lot in our area is fraudulent sellers, where a seller fakes being the owner of a property and contacts an agent, and they push through on the sale, and they're not the actual owner. And one that I hadn't heard of until I started doing my research on it was title pirating, and that's where somebody will create a fake title or fake documents to become the owner of the property.
They're fraudulent, they're forged, but then they get recorded with the county, and now that person is shown as the owner of the property. And actually since I started doing my research and started doing that, then all of a sudden I started seeing commercials on that. So that I think is going to be one that we're going to start seeing a little bit more often also.
JO: Yeah, I've definitely seen those commercials as well. I haven't seen that happening here in southwest Colorado or northern New Mexico, but what I have seen was the second one that you talked about, the fake sellers. And they seem to be targeting absentee owners, out-of-state owners. So they'll go into the county database and see the landowners, vacant land mostly, that are not in the area. They've got an out-of-state mailing address, and those are typically the ones that we've been seeing.
KF: Yep, same here. We've actually experienced four of them, and nobody was local actually. Of the four that we experienced in our office, three of them were out-of-state, and then one of them was a seller out of the Twin Cities area. So still in Minnesota, but not local to where we're at.
JO: Well, what's your process look like when you're going through a new client, taking on a new listing? Tell me a little bit about your checklist or your due diligence that you're going through to avoid this.
KF: Yeah, we definitely started taking our time with sellers. The first one that we experienced this year, the seller was eager, wanted to get it listed, wanted it done that day if the agent had time to do it and pushed it through. So we're definitely taking our time and looking for the red flags. And unfortunately, things are sticking out to us. Fortunately and unfortunately, you don't ever want to assume that the person on the other land is scamming you. But unfortunately, that's kind of where we're at right now. So through the year, since we started experiencing this, I did put a checklist together for my agents just to really be diligent about what they're doing. So when the seller calls, how are they contacting you? Is it only via email and text message? If it's a scammer, they're more likely to want to communicate that way versus meeting you in person or getting on a phone call. So how did the contact you is the first thing on my list. And then what's your due diligence? Did you meet with them in person? Did you ask them for a driver's license?
Thinking outside the box. You can go on and you can create a fake driver's license. And we've seen that happen. But maybe asking for a utility bill that will show the address of the property because the scammer is less likely to think about something like that. Obviously a driver's license, that's kind of a common thing to ask for, where a utility bill or tax statement, they might not think of that. So that's something to look for. The other thing is did they provide you with proof of ownership? Do they have a copy of the deed? Do they have a copy of tax statements from the past? Are they the ones that were printed out from the Internet or are they the actual one that the county sent through the mail? Things to look for. Where their documents are coming from. Doing a drive by the property. One of the agents that's in my RLI group had a client that or a buyer or seller call and wanted to sell their property. And she asked if it was planted. Nope, it's just vacant land. Well, she drove by and it's a cornfield.
And that's something if they were the actual seller, they're going to know if it's planted or not. So doing a drive by it and checking the property out and trying to catch them in some of those questions. Is it easy access or is it gated? If they have to stumble on that question, well, I don't remember. Well, if you're an out-of-state owner, you're going to know if your property has a gate on it or not. So just kind of thinking of some of those questions and then researching the person. One of the first things that I do when I get a call from a buyer is look them up on Facebook, look them up on Indeed. Fast People Search is a good place to go for phone numbers and email addresses. So just kind of looking up that their contact information and what their story is. I'll throw their name in and put obituary on the end. Is this somebody that's passed away? And now all of a sudden they're calling me to list their land. So just kind of doing your independent research on a client or a caller also to see what you can find out with your own research.
JO: Yeah, that's all great. Very good questions. I think a couple more that come out whenever somebody reaches out to me. The first question I ask is who referred you my way? Thank you for reaching out. Who should I thank for sending you my way? And if they can't tell me somebody, if they just say they found me online, well, then that's kind of the first alert. Not really a red flag, but just the first alert. And then if you start asking about the neighboring properties, as opposed to just tell me about them, but you say, Okay, is your neighbor a farmer, a rancher, modular home, old farmhouse, stick built, that type stuff? And they start backpedaling, then typically the red flag goes up. And like you said, if they don't give you time to drive by it, like if they're kind of pushy and it's too good of a deal to be true, if you think it's worth maybe 500 grand and they say, oh, we just want to unload it quickly before the end of the year, we'll sell it for 250, then it's like serious red flag. So those are kind of the three things that are my go to to try to weed out the real sellers versus the fake sellers.
KF: Yep, those are all great things, too.
JO: Now, do you have any real life examples that you've seen either in your brokerage or in the upper Midwest chapter of these things taking place?
KF: Yes, actually going into this year it's the fraud thing is something that we've started to hear more about. But where we are in Minnesota, we're such small towns, our area is kind of a cluster of old railroad towns. So every five miles is another town of 50 to 300 people. So you think like, it's never going to happen here. We're too small. I mean, we're not hardly a dot on the map. But we've actually experienced four of these now this year. The first one was a seller and they had contacted my office and it went to the floor agent and their story was they needed to sell quick. They needed the cash. They were from California. That one was actually a caller but wanted to do all the documents obviously online because they were out-of-state and wanted it listed that day. And it was springtime. Things are slow in Minnesota in the springtime because we're just coming out of winter. So my agent had time to do it. He went out to the property. One red flag there was that there was two parcels and the caller only wanted to sell one of them and didn't even mention the second one.
So when the agent went back and asked about the second one, he's like, nope, I just need some, I need quick cash. I don't want to mess around with both of them. Let's just sell the one. And we ended up getting a buyer on it the next day already because it was kind of a unique property. Seller accepted the offer verbally. The documents hadn't been signed. But then in the meantime, the actual seller had called the agent because he had put a sign up in the yard and the neighbor saw the sign and was like, oh, George always said if he'd sell his land I'd be the first one to know. So how come George didn't let me know because I would have buy it. So the neighbor had called the actual seller and that's kind of how that one got caught, how we found out it was fraudulent there. The buyer was very understanding and I think he's actually still now a client, the agent, they're still trying to find them something. So no hard feelings on that one. And it was a quick catch, which was good.
The second one was my client and it was a buyer. So I didn't have the seller on it. Seller was fraudulent. They had multiple parcels and had sold, had listed one of them. My buyers weren't interested in that one, but were interested in the one across the road. And the seller said, yep, we'll still sign it. Not as many red flags because I was on the buyer side of that. But looking back, we had asked for a survey because we needed to get an easement off of one of the other properties for like 100 feet to be able to access this one. And when I was talking to the appraiser, he's like, oh, I just surveyed all this land last year. I'm really surprised that they're selling. Not really a red flag because sometimes things happen, people need to sell. And so we had asked for a copy of the survey. And the seller's agent said, well, they lost it in a fire. Well, it's easy enough to get another copy, but still not a red flag. Sometimes people are lazy. So nothing really too concerning at that point yet. The way that that one got caught is it was kind of a minimum maintenance, low traffic type road.
And all of a sudden they started seeing a lot of, the neighbor started seeing a lot of activity and people walking on that property. And they contacted the actual seller who was not selling it. That one, we were about seven days out from closing when I got the call from the other agent. And my buyers were four days coming up into their wedding. So I think I called them on a Wednesday or Thursday. They were getting married on Saturday. So I cried them absolutely or called them just in tears. Like I just felt awful. I had been working with them for over a year and a half trying to find them land. So at the end of the day it's silver lining. We didn't get to the closing table. It was fine. They did finally close on something last week. So I don't know what ever happened with the sellers. If there was any repercussions on that end of it, because we didn't have that side. But that was the experience we had on the buyer's side.
JO: So you got good neighbors on both of those examples.
KF: Yes.
JO: I mean, where we're seeing it is on remote seasonal access, high country properties that you can't get to four or five months out of the year because there's too much snow. And so the roads literally shut down unless you go in on a snowmobile. And so we don't have those neighbors living next door to notice the for sale sign or notice the high traffic area. But that's great that you had that on both of those examples.
KF: Yep. And that's a good thing too, is if you are going to be listing something and you're concerned if it's fraudulent or not, talk to the neighbors about... Not just asking the sellers about the neighbors, but ask the neighbors about the sellers. In that first example, had they had that conversation, it maybe would have been caught a little bit sooner. Like, well, I know George doesn't want to sell because he'd said he'd sell it to me. So kind of picking their brain or maybe they have contact information for the actual seller to, or actual owner to follow up on it. So kind of picking the brains of the neighbors too, just to see what they know, or... The neighbor or the... They contact me to list the land. Well, that's weird because he passed away three months ago. So he can't be contacting you to list the land. Look for red flags there.
JO: Yeah. Great point. So the vacant land is obviously big for target fraud, but I understand that you've dealt a little bit with the title fraud and you've got an example on that?
KF: I do have an example on it, and it's not something I experienced, but I did find it in doing my research. Kind of what I found out on title pirating is it's a little bit harder to catch because that document could be recorded and it could be months until you ever realize it. You maybe go to refinance your house and that's when you catch that somebody has changed the deed into their name. So it's a little bit harder to catch on it, but I did in my research find a story about Graceland. So we talk about this being in rural areas and vacant properties, but it did happen to Graceland, which is everybody knows about Graceland. In 2024, there was a notice that went out that the whole property was going to be auctioned because of a mortgage foreclosure. And what had happened was this company was created specifically for this purpose to try and buy it or through the foreclosure foreclose on it. They had created fraudulent documents saying that Lisa Marie Presley had took out a mortgage on Graceland prior to her passing away.
Well, then she passed away. Obviously, the payments weren't being made and now it went into foreclosure. And when this foreclosure notice went up, it caught the eyes of the FBI, which is good to know. And they had contacted Lisa Marie's daughter, like do you know anything about this? What's going on? This is odd. And the documents had... They were fraudulent. The signature of Lisa Marie on the documents was forged. And the notary who had notarized the document said, I never notarized that. I've never met her. I never met Lisa Marie. I never notarized anything. So even her stamp on there was fraudulent. It was the name on it was accurate. It was a true notary in that area. But her stamp had been used fraudulently also. So it's happening on both spectrums, rural and world known properties.
JO: So the scammers are getting fake notaries involved as well. Man, that's intense.
KF: Yep.
JO: I mean, other than the commercial, the ads that we talked about earlier where you can pay for the, I think the guy talks about like title lock or whatever. Like, how do you prevent this from happening?
KF: There's some counties that will do it too, where they can put an alert on your personal ID. So if something does come through their office to be recorded, they contact you just to verify that it is accurate. I know with our county, you can go in and search properties. So I just had a thing where I was getting mail for somebody else, but to my address. And I'm, again, more diligent on this just with what's happening in real estate. And that was the first thing that I did was go to the county website to see if something had been recorded on my address in this person's name because it was just goofy the amount of mail that I was getting for them. So that's something to do, just kind of be diligent, check into it every once in a while. And I know like a lot of credit cards and banks can set up alerts if something is happening with your social security number. If new mortgages are coming out, new loans are taken out in your name. There's different alerts that can be set up that way also.
JO: Yeah, I see a lot of little stuff. So, I mean, obviously what you and I are talking about, the land scams, the title scams, those can be hundreds of thousands, millions of dollars worth of scams. What I see a whole lot of that actually comes my way to my wife and I is whenever we put a property into an LLC or create a new LLC, we will get like right after closing the most legit looking paperwork that says, oh, pay $195 and we'll mail you your title policy or pay $75 and you'll get a copy of your deed. And I mean, it's all like little stuff like that. Total scam looks legit. And I just, I show it to my wife and I'm like, man, my older clients, they would look at this and they would think it's real. And these guys are just racking up money from these scams. And of course it's going to some P.O. Box in some other area, but it's just, it's crazy thinking about how easy it is to fool somebody that's not in the industry doing it every day like you and I are. And they just, oh yeah, let's mail them a check for $195 to get a copy of our title work.
KF: Yeah. Yep. We're seeing a lot of those too. And we've started... One of my agents actually just purchased a property and got one of those in the mail. And so we're whiting out the information and putting a scam thing on there and giving it to our buyers at closing just so that they know this is coming. And our title companies are good about letting them know that they're probably going to get one also. And if they see anything that looks scammy or they're concerned about, you know, always call us to verify beforehand, but we're giving them now a copy of the document so that they know what to look for because it does, it looks so real. It looks like it's coming from the county. It's only, like you said, a hundred bucks, $120. So they probably don't really think that much of it at the time. And it does sound like it's just part of the process.
JO: Yeah. It's pretty scary. So AI is obviously a big thing now in our industry and in our world. Are you seeing AI related fraud?
KF: We haven't really experienced anything yet. I did have one agent, though, that was contacted by someone to list some property and he asked for a copy of the driver's license and they sent a legit copy of it. And I don't know if it was AI-generated or how they did it. It was from Florida and it did have a Florida address. The picture actually did not match the picture of the seller. So there are ways to... Whether it's AI, Photoshop, anything like that, there are definitely ways to do it. And it's easy. I'm sure a lot of us are kind of getting into using AI and what we're doing. And it's, I've typed in something if I need a document and make it sound more legal than my gibberish and it comes out sounding very professional and looking very legit and legal. And it's so easy to do and as fast as that is changing. I think that's something that is going to be more common and probably more concerning because it's going to be so hard to tell what's real and what's not.
JO: Well, folks, if you'd like to learn more about fraud in real estate, you can find articles on the RLI Voices of Land blog and members can also access previous webinar recordings on the topic. Plus, be sure to attend events like the National Land Conference. It's one of the best places for land brokers to hear about trends like this and connect with other land professionals to hear about what's happening across the country. Well, Kelly, we got a few more minutes here. Anything else that you really want to hit on with our listeners on this topic of fraud?
KF: I think the biggest thing is just be alert. One thing that I did see in my research was always assume that you're going to be a victim, which you don't want to have that mentality about it, but it's going to be good for you and it's going to be good for your actual clients and have some kind of process in place. That's kind of why I put together the checklist that we're going to use in my office moving forward is have something that it's you're all following it. The one story I had talked about with my buyers when I had talked to that agent, I'm like, this is happening. We just had it happen once in our office. And she said, yeah, my broker said we've had 12 of these this year. Like then you need a process. So get something in place and it's going to save you too. I did see that having some kind of due diligence checklist, if it ever did come to where you closed on a property with somebody and it was fraudulent, showing that you did the steps and that you looked into the background and did the research on it is going to help you and your client to just to show that you did the steps and put the time into it.
And as much as we always want the next sale and that's how we earn our living, take the time to do it. And I think legit actual sellers, they're going to understand. If you're going to mail the documents versus e-sign, they're going to be understanding of the situation because of what we're seeing in the market or the industry with this happening.
JO: Yeah, we used to have a mentor here in Durango that his saying was slow down to go fast. Everybody's just thinking about that next deal, trying to get as much stuff in the pipeline as they can. And that's where trouble starts happening. But I love that saying, slow down to go fast.
KF: I like that.
JO: Well, thank you for joining us today, Kelly. If our listeners would like to get in touch with you, what's the best way for them to do that?
KF: Yeah, absolutely. My email is good. My email is upnorthagentmn@gmail.com. And then my cell phone number, which is good for calls and texts, 763-300-6334.
JO: That's a great email, up north agent, that's so relevant for somebody from Minnesota. I love it.
KF: Yeah, yeah, yep. I thought it'd be an easy one. And it's our area.
JO: That's smart. Well, folks, for more expertise on land real estate topics, be sure to check out the RLI blog. Follow us on social media. And of course, tune in for upcoming episodes of the Voices of Land podcast.
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