Sensing Red Flags? Tools to Protect Your Business & Your Clients
January 18, 2019
By: Guest Author, Virginia REALTORS® Staff Counsel, Cate Oroszlan
Scams are increasingly prevalent in the real estate industry, and whether the scammers emerge from the depths of the elusive darknet or veil themselves as clients, we want to make sure that you have the tools to protect yourself and your business.
You want to be aware of deals that seem too good to be true, evasive buyers or sellers who exclusively communicate by email and refuse phone calls or in person meetings, and anyone who asks you or your client to wire money overseas.
And remember to trust your intuition – and when in doubt – ask questions.
Before engaging a client:
- Develop and employ identity verification procedures for new clients.
- Use complex passwords and two-step verification where possible, and update your passwords regularly.
- Do your due diligence by ensuring that the person contacting you to sell a property has the ability and legal right to sell the property. Also confirm that a purchaser has the prequalification to purchase a property or is working with a lender to secure those funds.
- Educate clients and customers on the risk of wire fraud in real estate transactions.
During the transaction:
- Confirm proof of funds from buyer at the time of ratifying the contract.
- Do not front money to clients or customers for costs they are expected to cover.
- Warn clients against forwarding money for a deposit for a property that they have not seen in person.
- If you are rebating for an overpayment, confirm with your banking institution that the original payment has cleared your bank account.
- Verify all requests for changes in payment procedures via telephone or in person.
- If you think you or a client has been a target of wire fraud, contact the bank and file a report with the FBI’s Internet Crime Complaint Center (IC3) immediately.
If you have questions or concerns, please contact the Legal Hotline.
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