A recent report from CertifID, a company that provides security solutions to the banking industry, found that one in three real estate transactions may be the target of some form of real estate fraud. The rise in real estate fraud is impacting the buying and selling of real estate rental markets. Benzinga examines this issue and offers some tips to avoid becoming a victim.
Phishing scams and wire transfer scams in real estate sales transactions
Phishing is an insidious form of real estate fraud in which scammers send emails that appear to be from financial institutions or real estate agents. This communication typically includes wire transfer instructions directing the recipient to transfer money to an account unrelated to the transaction. They often look official and may include the bank's logo on the sender's signature line.
Phishing scams have been known to fool everyone from buyers and sellers to experienced employees of title companies, law firms, and real estate agents. Even worse, it can be difficult to get back money sent to scammers. Many unwitting victims don't realize their down payment or earnest money has vanished into thin air until they arrive at closing, by which time it's already too late.
Phishing scams can be difficult to spot, but be aware of the following red flags:
Incorrect email address: Many phishing emails claim to be from banks or financial institutions, but if you look closely at the sender's address line, you'll see a random email address, or one or two letters off from the actual financial institution's name. It is an address. . Please read the email address carefully. If it doesn't seem right, it probably isn't.
Poor English or grammatical errors: Since many phishing and real estate wire fraud attempts originate from overseas, the scammers may not be fluent in the written language. Be wary of emails that contain misspelled words or grammatical errors that are unlikely to be made by a native English speaker or writer.
Preliminary steps to take before sending or receiving money
You can also proactively take some of the following steps to protect yourself from possible fraudulent wire transfer requests.
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Please do some research. Most title companies, law firms, and real estate agencies are small businesses and all of their employees are listed on the company website. Even large banks may have their own website for each branch. If you receive an email requesting a wire transfer of funds, check the company's website or directory to see if the person requesting the wire transfer of funds works at the specified location. please.
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Please call to confirm wire instructions: Even if you are 100% sure that the sender or person requesting the funds is legitimate, we recommend that you call again to review the wire transfer instructions before sending the funds. Ideally, you should be able to call the office or branch phone number listed on the website. Be very careful when confirming wire transfers via the requester's cell phone.
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Keep everyone updated: Before sending money in a real estate transaction, send an email confirming the transfer instructions and copying all parties involved in the transaction (real estate agent, attorney, mortgage broker, title or escrow company) so they can send the money. Wait until All answered in the affirmative. It is highly unlikely that a phisher would be able to duplicate all of these email addresses. If a scam is being committed, someone in that email chain will speak up and say they didn't ask for that, or that those aren't the correct bank account numbers.
Protect yourself with rental transactions
Although the money needed to move into a new rental property is less than the money needed to buy a home, the first month's rent and security deposit can cost thousands of dollars. Because of this, scammers are also starting to dabble in rental scams. You can protect yourself from real estate rental scams by following these steps.
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Avoid rentals that are too good to be true. If the location you're considering looks perfect but is dramatically cheaper than comparable priced properties, that could be a red flag.
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If you cannot enter the premises, please leave the area. Some real estate scammers will cut and paste photos of luxury properties to look like their own and make excuses as to why they can't let you in. I invite you to take a look. This tactic is almost always a scam.
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Please do your research before paying. Most states require off-site real estate professionals to be licensed. Perform a license search by searching your state's real estate agency for the name of the person who showed you the property. Not having a license is a red flag. If the person showing you the property claims to be the owner, an online title search by address at the county registrar of deeds will reveal the owner's name.
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Stay alert
Although these steps will not give you 100% protection, following them will greatly reduce your chances of becoming a victim of real estate fraud. Be cautious, ask questions, use common sense, and trust your instincts. If something doesn't seem right, don't continue until it's correct. We work hard for our money, but when it comes to real estate transactions, an ounce of prevention is worth at least a pound of cure.
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This article: Useful Tips to Protect Yourself from Real Estate Scams originally appeared on Benzinga.com.
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