Property Legitimacy Checks: Protect Yourself Before You Buy
A due-diligence checklist to verify a property, seller, and agent are legitimate — title and lien searches, permit history, license verification, and how to avoid wire-fraud scams at closing.
Most real estate fraud is preventable with a few verifications. Before money moves, confirm the property, the people, and the paperwork are exactly what they claim to be.
The verification sequence
VERIFY THE PROPERTY ──▶ VERIFY THE PEOPLE ──▶ VERIFY THE MONEY
• title & ownership • agent license • escrow/title identity
• liens & taxes • seller identity • wire instructions
• permits & zoning • lender license • call to confirm
1. Verify the property
- Title & ownership — a title company or attorney confirms the seller actually owns it and the chain of title is clean.
- Liens & back taxes — unpaid property taxes, HOA dues, mechanic's liens, or judgments can follow the property. Pull the county record.
- Permit history — check that additions or remodels were permitted. Unpermitted work can mean fines, insurance gaps, and financing problems.
- Zoning & use — confirm the legal use matches what you intend (e.g., can it be a rental / ADU?).
2. Verify the people
- Agent's license — look up any California agent or broker on the DRE license lookup. Confirm it's active and complaint-free.
- Seller's identity — deed fraud exists. Title/escrow verifies the seller is the true owner, not an impostor.
- Lender / mortgage broker — verify companies and loan originators on the NMLS Consumer Access database.
3. Verify the money (wire-fraud is the #1 threat)
Closing wire-fraud scams are common: a criminal emails fake wiring instructions posing as your escrow or title company.
- Never trust wire instructions sent by email alone.
- Call a known, verified phone number (from a separate source, not the email) to confirm every detail before sending funds.
- Be suspicious of last-minute changes to account numbers.
Red flags to walk away from
- Pressure to skip inspections, title, or escrow
- A "seller" who can't be verified as the owner of record
- Deals routed outside a licensed escrow/title company
- Prices far below market with urgency to wire a deposit fast
Due-diligence checklist
- Ordered a title report / preliminary title
- Searched liens, judgments, and back taxes at the county
- Confirmed permits for additions/remodels
- Verified the agent's DRE license is active
- Verified the lender/broker on NMLS
- Called escrow/title on a known number to confirm wire details
- Bought an owner's title insurance policy
Resources
- California DRE — Verify a real estate license
- NMLS Consumer Access — Verify a lender/broker
- CFPB — Mortgage closing scams: how to protect yourself
- Los Angeles County Registrar-Recorder and Assessor
This is general guidance, not legal advice. A licensed escrow/title company and, where needed, a real estate attorney are your best protection.
Educational information only. This article is provided for general informational purposes and is not legal, tax, or investment advice. Entity, trust, and tax strategies depend on state-specific rules and your individual situation, and should be implemented only in coordination with a qualified attorney and CPA.