Imagine receiving an email with last-minute changes to your closing instructions, or a phone call from someone who sounds exactly like a person you have been working with throughout your home purchase. Would you know what to do next? As a REALTOR®, I know how much trust that buyers and sellers place in the professionals guiding them through a transaction. September is REALTOR® Safety Month, and protecting that trust is an important part of our work. This week, we are sharing the National Association of REALTORS® Consumer Guide, “Fraud Red Flags,” to help buyers, sellers, and homeowners recognize potential warning signs and know when to ask questions.”
Most real estate transactions occur safely, but there’s a growing need to keep an eye out for fraud. Increasingly sophisticated scams, including use of AI to impersonate people, can occur at any stage of a transaction and often aren’t immediately obvious. If something occurs that doesn’t seem quite right, this resource will help you understand the potential risks and take appropriate action.
Red flag: Someone offers to sell or lease you a property outside of a regular channel, such as the multiple listing service, and wants to complete the transaction online rather than in person.
What it could mean: A fraudster may be posing as the property owner to steal proceeds from “selling” or “leasing” a property they do not own.
What to do: An agent who is a REALTOR® can help you determine whether the person’s property ownership information matches public records.
Red flag: You receive suspicious emails requesting passwords, account information, wire details, Social Security numbers or other sensitive information.
What it could mean: A criminal may be trying to steal personal information to facilitate future fraud.
What to do: Don’t respond. Report the suspected phishing attempt to your email provider, and change passwords if accounts are compromised. You can also report suspected phishing attempts to the Federal Trade Commission at reportfraud.ftc.gov.
Red flag: During a transaction, you receive an email with instructions for transferring funds.
What it could mean: Criminals engaged in wire fraud could have compromised communications to redirect escrow money, down payment funds or sales proceeds to their own accounts.
What to do: Any instructions for wiring funds should be verified with a trusted advisor, such as your real estate agent. Especially when you receive last-minute changes, be skeptical.
Red flag: A communication seems unusual or out of character.
What it could mean: An individual may be impersonating a legitimate transaction participant.
What to do: Verify the communication using a known email or phone number—or in person.
Red flag: You discover unauthorized title activity on a property you own.
What it could mean: A fraudster may have transferred ownership, or attempted to do so, through forged documents.
What to do: Consult legal counsel and report the issue to law enforcement. It’s a good idea to check county records periodically—and investigate whether your county offers a recording notification service that will alert you to new (possibly fraudulent) deed filings.
Red flag: You’re approached with an opportunity to invest in a real estate venture or other “exclusive” investment program—if you act fast.
What it could mean: When you’re being pressured to get in on an investment before it’s too late, the deal may be too good to be true.
What to do: To avoid being lured into a fraudulent scheme designed to steal funds, talk with trusted advisors and do your due diligence.
Bottom line: A simple three-step plan—stop, verify and then act—will help you avoid trouble. When something appears suspicious, do not act on the questionable request, send funds, provide sensitive information or use the contact information contained in the suspicious communication. Instead, independently contact your real estate professional, lender or settlement/title provider using previously verified contact information. Those professionals can help you determine what additional verification, reporting, legal, law-enforcement or transaction steps are appropriate.
Important: If you’ve transferred funds to someone who you suspect has committed fraud, treat the situation as urgent. Time can be critical in recovering funds and limiting losses. Generally, the first 24-48 hours are the most critical. Contact your financial institution and law enforcement as quickly as possible—and report the incident to the FBI’s IC3.
Protecting yourself during a real estate transaction does not mean you have to know every scam or recognize every warning sign on your own. It means knowing when to ask questions and having trusted professionals you can turn to for guidance. Your REALTOR® is there to help you navigate more than finding a home or negotiating an offer. We are also here to help you recognize potential concerns, connect with the right professionals, and protect your interests throughout the process. During REALTOR® Safety Month and throughout the year, I encourage you to make safety part of every real estate decision. #That'sWhoWeR
Greater Chattanooga REALTORS® is The Voice of Real Estate in Greater Chattanooga. A regional organization with nearly 3,000 members, Greater Chattanooga Realtors is one of some 1,200 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors service Hamilton and Sequatchie counties in southeast Tennessee, and Catoosa, Dade, and Walker counties in northwest Georgia. For more information, visit www.gcar.net or call 423.698.8001