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Anyone can fall for a scam, even in real estate. Here’s what you need to know

Ilyce Glink and Samuel J. Tamkin, Tribune Content Agency on

March 7 was National Slam the Scam Day, according to the Social Security Administration. While most people understand that there are many scams perpetrated by extremely clever bad actors, what is not well understood is just how easy it is to be taken in by these scams.

Phishing, vishing, and other cyber-security scams are terrifying. Losing your entire life savings happens every day to unlucky and uncareful people. Less well known are various real estate scams that claim buyers, sellers and homeowners as victims. Being aware of what these scams are, and how they might try to entice you, is the first line of defense.

Let’s start with your financial information. If you’re buying or selling a home, you have to make sure your financial information stays secure. Especially when it comes to how and when you send money to or receive it from a real estate closing.

Buyers must ensure that any information about where closing funds should be sent is real, correct and up-to-date. We can’t emphasize this enough: Be extremely careful when sending your money to the settlement agent. Wire fraud is a growing problem in real estate. We’ll explain why in just a moment.

Sellers also need to take extreme care. You need to make sure that the settlement agent receives the correct information about where to send the closing proceeds. In other words, take it upon yourselves to provide the settlement or closing company with the information. Don’t risk going through a middle person. Upload this information only into a secure form.

From our perspective, buyers and sellers are often unaware that there are impostors and bad actors out there looking for any opportunity to get in the middle of a transaction to scam buyers and sellers out of their money. All of the money sent to pay for a house. All of the proceeds (minus the mortgage) that the seller should receive after closing.

 

Tricking you isn’t as hard as it sounds. Scammers use fake email addresses that are suspiciously similar to email addresses that buyers and sellers see in their dealings with title companies, settlement agents, real estate companies and lawyers. By impersonating these companies, they try to trick buyers into sending their money to them rather than to the place the money should go.

To avoid being a wire fraud victim, you must always verify the wire information with a trusted source by phone. Call the number that you get from the settlement or closing company in your closing package. Call them to verify account information. Make sure you’re calling the right number and you talk to someone you trust. Confirm all of the information to make sure you are sending the money to the right place.

You should remember that in a real estate transaction, no one will ever ask you to send your money by using gift cards, actual cash, or other online cash payment systems. No one will tell you to use PayPal or Venmo to send closing fees. Settlement agents in real estate transactions will only take bank checks issued by local banks or wire transfer of funds coming directly from your account directly to the settlement agent’s bank account.

If you’re selling, make sure you work directly with the settlement agent to securely upload your account information. This is the account where the closing agent will deposit the proceeds of the closing (after paying off the mortgage and any liens.) Verify (or have your attorney verify) with the closing company that it has the correct information just before the closing.

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