Unfortunately, we live in a day and age where fraud has become a fact of life. Scams in real estate can vary from mortgage fraud to hackers breaking into real estate and title agents’ emails. Â Criminals seem to come up with new scams every day. Before transferring funds during a transaction take a moment and check directly – using a verified phone number – to the professional the funds are being transferred to. Your vigilance can make all the difference.
In the Santa Barbara News Pressâs Sunday House and Home magazine, a reader asked realtor and columnist Marsha Gray recently, âMy elderly mother has owned her home here in Santa Barbara for decades. Ten years ago she took out an equity loan for needed repairs on the house. Sheâs current with her payments and isnât struggling. Sheâs been receiving phone calls from a gentleman who claims there is a government program that forgives Second Mortgages for seniors. Heâs pressing her to meet and sign documents to get the process started. It sounds like a scam to me, but she wonât stop talking to him because âheâs so nice.â What do you think? Marsha responded, âYes it sounds like a predatory scam on an elderly person, Â contact the Police.â
One of the latest scams is criminals hacking into real estate agents or other persons involved in a real estate transactionâs email accounts. The hacker is able to learn clientsâ names and Escrow and Title Company information including closing dates, the release of earnest monies when a sale is canceled, and the sellerâs proceeds from a sale. The hacker tracks the escrow and at the appropriate time sends false wiring instructions. Buyers should always verify with the Escrow and Title Companies directly before wiring any funds. Attorneys, escrow agents, real estate agents, and title agents have all been targeted in these scams.
Do not let your guard down. Unfortunately these days you need to start with the assumption that any email in your inbox could be a targeted attack from a criminal. If it sounds to good to be trueâŠ
Lastly, always buy Title Insurance when you purchase a property. This insures that youâre buying the property from the right party. Unfortunately, there have been more than a few examples of people selling homes they donât own. One example is (and the names have been changed here) John Smith in Northern California took off for Europe for a year and left John Smith Jr. at home. After they left Junior listed his Dadâs property for sale. Junior sold it and left town. Having the same name as his dad everything appeared fine. When Dad returned from Europe he was shocked to find strangers living in his house. The Title Company took responsibility and the buyers returned their money and Mr. Brown moved back into his property. What happened to Junior is anyoneâs guess. This isnât the stuff of real estate folklore – unfortunately, itâs true. Whenever possible itâs probably best to err on the side of caution.