Fake Purchase Contract Scams: How Title Companies Spot Them

A title company is the neutral party in the middle of a real estate deal. It checks who owns the property, holds the closing money, and pays it out only when the deal is real and the funds have cleared. That position in the middle is why scammers target title companies: get one to accept a fake deal, and its escrow account starts to look like a way to move money.

A request that recently came in to Will at Pruitt Title followed a pattern title companies see often. Every name, number and address is left out here, because scammers often use stolen identities and the people named may be victims too.

Why the title company's escrow account is the target

• Confirms ownership. A title search shows who owns the property on the public record and what liens are recorded against it.
• Holds the money. Closing funds, and the earnest money when the title company is the escrow agent, sit in a separate escrow account, not with the buyer or seller.
• Pays out only when it's real. Funds are paid out at or shortly after settlement, once the documents are signed and the money has actually cleared.
• Records the deed and issues title insurance, so the new owner's ownership is on the public record and protected.

More on the job itself: what does a title company do?

The anatomy of the fake-contract scam

The request arrived by email with a generic purchase-agreement template attached and one question: could Will and the Pruitt Title team provide escrow, and what are the charges? The details that gave it away:

• A generic template, freshly made. It was a fill-in-the-blanks form, not one of the association contracts local agents use, such as the Northern Virginia, Virginia REALTORS® or Maryland REALTORS® forms. A generic form isn't proof of fraud on its own, but this one appeared to have been made minutes before it was sent.
• Nothing signed. The signature lines were blank.
• Names that don't match. The seller named in the email was not the seller named in the contract.
• A long-distance buyer and a free email address. The buyer was out of the country, and the sender wrote from a free webmail account.
• An oversized deposit. The earnest money was about 19% of the price. In the DMV a deposit typically runs 1% to 3% (see what earnest money is).
• Price shopping first. The questions were about opening escrow and what it costs, not about the property or the closing.

How the scam would have played out

There are two common versions, and this request had the markings of both.

1. The overpayment refund. The "buyer" sends a large deposit by counterfeit cashier's check or a transfer that's later reversed. Then the deal "falls through," or the buyer claims to have overpaid, and asks for a refund wired to a new account. The refund is real money; the deposit never was. The FTC describes the same pattern in its fake check scam guidance: someone overpays you and asks for the difference back.
2. Seller impersonation. Someone poses as the owner of a property they don't own, often vacant land or a home owned free and clear, and tries to "sell" it so the sale proceeds are wired to them. In a 2026 American Land Title Association survey, 59% of title firms reported at least one seller impersonation attempt in 2025, more than double the 28% in its 2024 study. The leading red flag it lists is a seller who avoids meetings, phone calls and video.

Either way, the defense is the same: verify the people, verify the property, and never pay out money that hasn't cleared.

How to check that a contract and the people in it are real

• Match the seller to the public record. The seller on the contract should be the owner on the deed. A title search checks it.
• Talk to the parties live. Real sellers will take a phone or video call. Use a number you found yourself, not one from the email, and be wary if a seller insists on signing remotely with a notary they choose.
• Look for the agents. Most home sales involve a licensed agent on at least one side. A deal with none isn't proof of fraud, but it removes a check. You can confirm a license with Virginia DPOR, the Maryland Real Estate Commission or DC's licensing agency (DLCP).
• Question the deposit. An unusually large deposit, especially paired with an early refund request, is the classic setup.
• Wait for funds to clear. A balance showing in an account is not cleared money, and a settlement agent pays out only funds that have actually been collected.
• Never send a refund to a new account. Any change in where money goes gets confirmed by phone at a known number.

Buyers face a related risk at the other end of the deal: a fake email with new wiring instructions. That version is covered in how wire fraud works in real estate.