While there can be distrust of Real Estate Sales Agents in general, much of the mistrust is unwarranted, based on the image of the smarmy fast-talking luxury car driver. This perception is just one reason I am a Realtor and am held to a higher standard than just a Real Estate Agent or Broker (as we are called in Washington State). Although I would behave in an ethical manner regardless of fiduciary responsibility, it helps to support an organization that aids in raising the bar on a national and local level. I fully realize my clients put their trust, their nest egg, their family's health, and well-being as well as their happiness in my hands. It's not a trust to take lightly and is one that I am truly honored by.
Whie some may think this is an article about fraud with RE professionals and while I have no doubt it happens, I have yet to experience it with licensed professionals. This article is about people outside of the industry intentionally meaning to cause harm to those involved in a real estate transaction.
Most of us are familiar with the Craigslist rental scams, the Nigerian prince that contacts us from out of the blue asking for our assistance and the unscrupulous door to door Traveler construction scams. This blog post is about two newer and more sinister trends.
The first is wire fraud . We all know of email hackers. More recently there is a different approach for a much larger financial gain.The hacker will enter through someone's mail involved in a RE transaction. The breach could be through the agent, the lender, the title or escrow companies or the client themselves' email. The hacker lies patiently in wait for the right time when the buyer will likely wire the down payment or the whole cash purchase amount to the escrow company. The perp will send an official looking document with the wiring instructions to their own account. In other words, an unsuspecting buyer will wire their funds directly to the hacker's account. These funds have almost no chance of being recovered. Not only does the transaction fall apart, but the buyers money is lost forever.
How To Protect Yourself From this Scheme- You will already have the escrow closer (officer's) name early in the transaction if you don't know who that person is, ask your Realtor. Look up the escrow company from another source, i.e. their official website you find in your own search engine. Call the person on the phone (not the phone number in the email) and verify the wiring instructions you received is correct. Yes, it's a hassle but to save $10,000 or $1,000,000 this deceptively simple task is well worth the 5 minutes of time to assure your funds land in the intended account.
The second is overpayment for a local service company. Much like the rental schemes on Craigslist, this has a net of only a few thousand dollars. The criminal (no hacking required) sees a beautifully staged home for sale online. They then barrage a number of local small businesses with the usual stories about how they have sent too much money and need to have a refund from the overpayment by their credit card or cashiers check for services rendered. They gain their information using listing photos and other public information websites.
My personal experience involved a tree removal company that was "hired" via email (the perp was presenting himself as the new buyer of the home who had throat cancer and couldn't speak on the phone) to cut down all the very large trees in the back yard of a home newly listed for sale. The gain was only going to be a few hundred dollars that were "overpaid" by the man ordering the job via a credit card (likely stolen). Luckily I arrived to host an open house and I saw the tree cutting company prepping for the job to be performed the next day, and told the owner of the home who put a stop to it. The next morning I received a phone call from a windshield company who was there to replace the windshield on a car in front of the house, this too was a bogus job order. Luckily the unsuspecting neighbor's windshield remained intact as well.
How To Protect Yourself From this Scheme- When you list your home, make your neighbors are aware you won't be having any services performed in your absence. I heard of an instance of a roof being replaced, so you might even want to post an exterior sign for all workers to check in with you via cell phone before estimating a job or starting any work.
Apparently more petty crimes are being instigated by using the photos and addresses of vacant listings to dupe small business into performing services not actually needed, indeed in the case of the tree company, they would have removed priceless irreplaceable mature trees from the yard. The contractor should have performed more due diligence, especially after viewing the email the tree company was sent. As more of these scams take place no doubt service companies will put more stringent policies in place.
Of course, the vast majority of real estate transactions in King county take place with no interference of interlopers attempting fraud. For more information you can reach me at Sellers@Kim-Mulligan.com
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