At a time of increasing real estate fraud, a new report outlines what consumers expect from their agents in terms of protection.
60 percent of consumers who recently bought or sold homes responded to a survey conducted on 650 consumers who recently conducted either. Most respondents (71 percent) feel it is someone else’s responsibility to educate them about real estate fraud; real estate agents were most commonly expected to provide this knowledge.
CertifID CEO Tyler Adams suggests: “No matter how often we talk about it as an industry or not, the message about fraud seems to get lost and not reach consumers,” according to CertifID’s research. To protect yourself and your clientele against possible scams or scammers stepping into transactions at any point during transactions a five minute conversation at the beginning is worth its weight in gold compared to finding out too late that they sent money directly into someone’s hands three days earlier and can no longer regain it; unfortunately what happens all too often!”
Adams believes cybercrime in real estate transactions is one of the fastest-growing crimes in America, but we aren’t talking enough about it to make consumers aware. He predicts there will be an eventual reckoning when consumers sue all parties involved, such as realtors or banks: ‘You have completed 100 transactions while I only did one recently and a fraudster took your email credentials and sent fake emails that caused me to lose everything!'”
CertifID reports that 22 percent of fraudulent communication from scammers appears to come from real estate agents during transactions, as indicated by CertifID’s study. At present, there has been an upsurge in lawsuits alleging real estate professionals or others involved with transactions for failing to adequately inform clients. In 2018 (Bain v. Platinum Realty LLC), a Kansas court found a real estate agent and her brokerage liable after one of their buyers was forwarded false wire instructions purporting to come from them, leading them to lose $196,622. Although she denied ever sending such email, a jury found the agent and her brokerage 85% responsible, ordering them to repay the buyer $167,129 of funds lost during this transaction; later upheld by federal courts.
Real Estate Scams Are Growing: Nearly 1/4 Are Targeted New data shows real estate scams may be more common than you realize: nearly one-fourth of consumers report being the target of fraud attempts during the real estate closing process, according to CertifID’s report. Last year alone, over one in twenty consumers fell prey to these schemes with median losses exceeding $70,000 from either stolen down payments from buyers or net proceeds being misappropriated through fraud schemes for sellers.
Real estate transactions are particularly vulnerable to fraud because data about listings are readily available through multiple listing services (MLS) and county records; transactions involve large sums of money; and up to 10 parties could potentially share information regarding closing dates, according to the report.
