Real Estate Scams and How to Avoid Them

[Benjamin Riehle]

The accomplishment of purchasing a home or an investment property is already stressful and can take a considerate amount of time. Scam artists know this, and because of their weak moral fiber, they try to profit from this monument time in a person’s life. First time home owners and investors need to be aware that scams often happen in real estate because a lot of information is public record IE: name, address, parcel numbers. In this post we are going to discuss a scam that was recently attempted on one of our agents in Kansas City and wire fraud that has affective a lot of people in Tucson AZ lately.

The scam:
Brian our agent, received a notice in the mail stating that if he wanted to obtain the deed for an investment property he recently closed on he would need to: “Respond to the letter by Jan 31st, and pay the service fee of $87.”

The letter looked legitimate, had his name, the property address, and the parcel number. Like I said in the first paragraph, that is all public record and can easily be found on the county assessor web site. The timeline is given to make the victim feel as if he/she needs to make a rash decision and pay the fee. This scam is not centralized in Kansas City, and the attempts can be seen nationwide.

The Scam:
Information is being shared online, through emails and text messages, speeding up business, but making it easy for hackers to locate valuable information. Hackers are accessing email accounts through captured passwords, and then scanning for emails related to real estate transactions. They respond to the emails with new wiring instructions from the agent, title representative, or attorney. The home buyer unsuspectingly wires the funds to the hacker's account. Once the funds are sent they are not retrievable. 

How to avoid being a victim:
If you are a real estate agent you need to build a standard warning about wire scams into your e-mail signature, stating you will not discuss personal financial information over e-mail. Always use strong passwords and change them regularly, and advise your clients to do the same. Brokers should consider employing a staff member who’s responsible for monitoring, updating and implementing information security systems and procedures at your company. Millions of dollars have been lost because of wire fraud, it’s very easy to inform your clients about the danger. As a home buyer or investor, try to avoid free WIFI hotspots, speak with your agent on the phone to verify you have the correct account, and never share personal financial information over an e-mail.

What other scams have you seen recently? Please comment below so that we can be aware of the practices and help our clients avoid losing out on their hard-earned money.

Do your research, stay safe, and have a purposeful day