Fraud and Your Real Estate Transaction
If you have been in the business as long as I have, you will have seen so many changes - some good and some ludicrous and some necessary but still ludicrous.
I have seen commercial deals paid for with precious gems.
I have seen foreign buyers purchase investment properties with cash from their country.
I had a buyer, one time, try to settle with suitcase full of cash at the settlement table. The title company made him put the money in the bank and come back a few days later with a cashier's check.
At one time you financed the property and could bring a personal check to settlement for the remainder.
Then, you could bring a cashier's check but have a personal check in case there were any last minute changes to the HUD-1. A few buyer's showed up at settlement claiming not to know they needed to bring a cashier's check and their personal check was returned for non sufficient funds and the buyer's could not be contacted following closing. So, no more personal checks.
Then fraudster's were able to duplicate cashier's checks and it wasn't until a week or two after closing and all the funds had been dispersed and the cashier's checks turned up fraudulent and title companies then insisted on wire transfers.
Now, hackers are hacking into Realtor's emails, title company emails and so on and sending wire transfer instructions to buyers and sellers just prior to closing and money is wired to thieves accounts. Once wired it is impossible to retrieve.
On Friday, I had a closing. A closing that seemed to go really well. The seller had to bring money to closing but somehow neither her agent or the title company had given her wiring instructions. She called her bank, a local credit union that instructed her on how to do the wire transfer online. She went ahead and did the wire. The Fraud Department at the bank kicked it back for suspected fraud. She, her Realtor and the title company spent the entire morning and early part of the afternoon today convincing the credit unions fraud department that this was a legitimate transaction and a legitime transfer and yes she did know where the money was going and had confirmed the account. And, after much consternation the sale is now closed and checks dispersed.
But, where do we go from here? Do we go back to cash transactions, keeping our money hid in our mattresses and only dealing in cash? How do we thwart these thieves?
Know who you are doing business with, pick up the phone and confirm the details, check and double check.