CHICAGO – Jon Goodman, real estate attorney at Frascona, Joiner, Goodman and Greenstein, P.C., shared information with Realtors® and other attendees today at the 2017 REALTORS® Conference & Expo about the risks of real estate fraud and how to avoid falling victim to scams in the marketplace.
During the session, Goodman said that real estate transactions are often complicated and tedious dealings and demand close attention from the agent, buyer and seller. He said many times real estate professionals and consumers do not consider the risks of fraud in real estate, even when wiring large sums of money. Goodman said that real estate brokers are especially vulnerable to becoming victims of wire fraud.
“You cannot be a successful real estate broker unless you are an optimist and open with your clients. I don’t want you to change that professional quality, which is so crucial to success in real estate, but your relationship with clients makes you susceptible to fraud schemes,” he said.
Goodman shared several red flags real estate professionals should keep in mind during a transaction and the steps agents can take to ensure transactions are secure:
- Seek to work with people you know. Ensure you can recognize their voice and know something personal about them that you can ask to confirm their identity.
- Do not be the direct source of wire instructions to clients, and let clients know that you will not be the source of those instructions.
- Educate clients to not rely on wiring instructions that come through e-mail or from a website.
- Wiring instructions should come from a secured system or confirmed verbally from a voice the buyer knows.
Goodman went on to say that if agents are included on wire instructions to their clients, it is crucial to do the following:
- Let clients know that you will not be e-mailing the wiring instructions, and only give clients the phone number to the wiring recipient verbally.
- Also, verbally give clients some information to qualify the source of the wire instructions. Do not put the qualifying information in an e-mail.
Goodman said if fraud is suspected, it is imperative to act quickly or homebuyers might find themselves out of luck. Additional tips for real estate professionals and consumers for staying safe from fraud schemes are available from NAR and the FTC.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.