Thoughts on validating a remote customer???

Question

To my broker's colleague, any suggestion on how to verify a remote investor who contacts you for investment properties? it's the first time that I'm being approached by someone who claims to live in another state and is looking for me to find them an investment property in my local area. They found my contact on homes.com. They said that they were looking to purchase cash, up to $2M. We also had a brief conversation over the phone this morning.

I verified their email and phones on Experian.com, both seemed valid although the phone line seemed to be Google VOIP.

- Should I ask for a copy of their driver's license or ID?

- Should I ask for proof of funds before I engage?

- Should I ask for a buyer agency agreement?

Trying to gauge the right level of due diligence to be done right at the get-go, and avoid wasting time or getting involved in a scam (not being too pessimistic!). Appreciate your thoughts! :)

Account Closed · Answer

After they build your trust, they say they need some way to transfer their money so they ask if you will hold their money for them and ask for your bank account.  Once they have your account they drain it.

The linkbelow is about a guy who tracks these scams

Taking $𝟏𝟓,𝟎𝟎𝟎 from Trash Talking Scammer

www.youtube.com/watch?v=ACKyicPeNvY

Marcus Auerbach · Answer

Smells like a scam, probably going after earnest money. Someone looking to invest $2M will not randomly call an agent out of the blue. They will throw some lingo at you about cap rates and IRR and sound sophisticated. If you are not an investor, it's hard to see through that - some of these guys are good.

Seattle is also not a very likely target market for OOS investors, because there are almost no markets higher priced. Investor money likes to flow to lower priced markets, like California to the Midwest etc.

A legitimate investor knows the market or at least has a lot of questions about the market. We have a team policy that we only work with OOS investors who are willing to visit, because Milwaukee neighborhoods are not easily understood from afar and we need to be on the same page with our clients, so we think of the same thing when we talk about a B or C neighborhood.

I would schedule a zoom, ask them why they target Seattle and what questions they have about your market, what experience they have so far and describe what type of asset they are looking for. And if they say it does not matter as long as it meets this one metric, be very careful.. Good luck!

Minna Reid · Answer

Are you licensed? You can't collect fees legally for finding real estate for others unless you are. Unless of course you are personally contracting the property yourself and then selling the contract.

Assuming you are a licensed agent - yes you are going to get a buyers agency agreement and proof of funds before you utilize your time helping any out of state investor. They are a dime a dozen and most are not qualified, or a scam. Serious buyers will provide these without issue. Push back means they are not qualified. I don't think zoom calls are necessary. Maybe a phone conversation, although honestly I have successfully closed many deals for out of state clients where we only ever communicated via text and email  and never even met.

Marian Huish · Answer

@Ali Veis I've been receiving more and more of these...  I have closed deals with out of state buyers in the past but really can't trust anyone who isn't prepared to have a phone conversation.  They say they want to correspond via WhatsApp (only) and that they 'don't use email'...  red flag.  Unfortunately I'm being more inclined to not even respond to texts, etc. from buyers I don't know.  I'd run it by your Broker or team lead for guidance if you have specific questions.  That's what they're there for!  -best.

Marian Huish · Answer

I actually never hung in there as long as Account Closed!

Ali Veiseh · Answer

@Marian Huish - Your point is well taken, thanks! Since you seem to have some experience with the WhatsApp scam, just out of curiosity do you know why they even reach out to agents to look up properties for them?

Ali Veiseh · Answer

Really appreciated all your input and great feedback! :)

Ryan Leonard · Answer

I agree with the zoom call idea. On top of that I wouldn't necessarily ask for proof of funds right away, but the moment they start asking you to do showings or sending you properties, I would ask for proof of funds so you can get that "checked off the list in case they want to write an offer". Not sure what standard practice is in Seattle, but in Wisconsin, it is common to get proof of funds when you start looking at properties with an all-cash buyer. This should prevent your time from getting wasted as well as not being too forward. Hope this helped!

Thoughts on validating a remote customer???

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