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I am currently in the process of purchasing a piece of land I found for sale online, by what looks like a small business that buys and sells land. I have had a friend in the area check out the property and made an offer. The seller's instructions were to deposit money into an escrow account setup by an attorney's office, then close on the property in roughly 3-4 weeks.

My question is how do I verify the person actually owns the property and I'm not being scammed? I have looked up the law office they referenced for the escrow account and saw it was a legitimate attorney and the phone number they gave me matches my search for the law office. My plan is to call them and verify the routing and account numbers match an escrow account that they own and that it's to be used for the property's address. I feel this would sufficiently cover my bases, but is there potentially anything more I can do to ensure I'm not being taken advantage of?

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    OP, what's the "general price range" of this transaction? To get a sense for whether it's a scam or a completely legitimate thing. BTW I don't see any reason you wouldn't mention the "online company" in question. (Your own privacy is not affected.)
    – Fattie
    Sep 29 at 16:27
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    Besides potential title problems already discussed in answers, watch out for defects in the contract of sale. For example, the advertisement was for a certain number of square feet, but the sale contract turns out to be for a much smaller area. Or you are actually being sold a limited right (mineral rights, etc).
    – Ben Voigt
    Sep 29 at 18:18
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    Then you need to research any restrictions on what you can do with the land. If it's a jurisdictional wetlands area, for example, you won't be able to build. Check zoning restrictions for sure.
    – Ben Voigt
    Sep 29 at 18:21
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    You're spending real Money (with a capital M) to purchase property; why would you not spend money to get a local lawyer to do this for you?
    – spuck
    Sep 29 at 22:20
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You are looking for Title Insurance. Basically, you pay a lawyer to perform due diligence to confirm that yes, the land is registered to the counterparty, without any outstanding debts registered against it, and if their search is incorrect, you have insurance that protects the value of your purchase.

Calling the named law office offered by the seller [preferably using the publicly available number directly listed off of the relevant state bar legal directory] would help confirm that they are using a real lawyer, but you can still protect yourself further. Their lawyer is not your lawyer - they don't work on your behalf.

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    Note: your lawyer won't be able to tell you if the price you are paying is 'fair', but at least they should protect you from an outright scam. Sep 28 at 18:37
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    Wouldn't lawyers who register deals with unrealistic prices raise questions regarding property tax evasion or money laundering? Sep 29 at 15:01
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    @DmitryGrigoryev Not sure I follow you. First of all, lawyers aren't really going to get involved in the pricing at all - from that perspective, they aren't really "experts" in valuation. Secondly, overcharging a 3rd party is by means "definitely" money laundering/tax evasion. There are likely reporting requirements about cash deals etc. that must be followed according to AML legislation, but that doesn't necessarily prevent such a deal from proceeding. I'm not sure how your comment applies to either this answer or the question. Sep 29 at 16:56
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    @BenVoigt I assume all jurisdictions would lodge tax debts as liens against the property, but I could be wrong. As to whether zoning restrictions etc. would reduce value - agreed, this process doesn't confirm you are paying a 'fair' price, just that you are paying for free-and-clear transfer of property from the registered owner. Sep 29 at 18:31
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    @DmitryGrigoryev The person who can give you advice about the value of a piece of property is a realtor. Even if you and the buyer are doing the sale directly without involving them on either side; you can still hire one on a fee for service basis to give an appraisal of the lands value. Sep 29 at 20:57
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The ownership of the land should be registered with the local government. As an initial check you should see if the listed owner matches the information you were given. But even that isn't enough to protect you.

You will need title insurance. If you will have a mortgage, and be pledging the property as collateral, the lender will insist on it. Regardless of the mortgage status you will also want to protect your investment.

The insurer will be making sure that the property records are in good standing. They will make sure that all the owners have signed off on the deal. They make sure that nobody else has a claim on the property.

You should also get a local attorney that is 100% unconnected to any party in this deal. They will make sure that all the procedures are followed and that your investment is protected.

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In addition to what others have mentioned, consider using a title company to handle the transaction. Not only can they offer title insurance, they handle other important aspects of the transaction as well, like ensuring that all required paperwork is completed and filed with the appropriate authorities, verify the seller's property description against surveys, ensure all parties get updated copies of deeds, etc.

A title company can also impartially handle the escrow portion of the transaction. They're a third party that's not directly involved in the transaction. Your description makes it sound like the seller's attorney owns the escrow account. Those lawyers would be working in the best interest of their client (the seller, not you) so any disputes that arise could be difficult to resolve.

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There is a gold-standard process for trading real estate.

It protects all parties and does a very good job. DON'T deviate from it. Don't "part it out" i.e. pick and choose which parts you want to bother with. Just do it. Straight up.

In the USA, real estate sales are normally done without a lawyer, but with a Realtor who serves as your buyer's agent, and is experienced at "ticking all the boxes" and untangling entanglements. They are a fiduciary meaning they must act in your interests.

They typically charge 3% of the sale price, except it's typically paid for by the seller, as the seller's agent charges the seller a 6% commission and the two agents split it. You can make other arrangements.

That's why I can't run down chapter and verse what the entire process is; I defer that to either a Realtor or a lawyer.

I know you're not looking for this, but a Realtor can also show you lots of alternatives to the ones you found, likely better suited for your needs and/or at a better price. Let's face it, half the allure of this property is the novelty of "buying it online". But if you actually look at your core goal - buying land - a local agent is your best "boots on the ground".

If the seller is hostile to the idea of you using a Realtor, that is a red flag -- the seller is likely trying to get you to "shortcut" the gold-standard process so they can work a scam on you.

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