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Couple sues real estate agent, title co, bank over wire fraud #WatchOut

(HOMEOWNERSHIP) Wire fraud in the digital age: it happens. Is there anything that can be done about it or is everyone vulnerable?

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bonds and mortgages

A simple wire transfer

It should have been a dream come true for James and Candace Butcher. They’d chosen the house they wanted to retire in, negotiated the price, and sold their home for a down payment.

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All that was left was the last wire transfer – $272,000.

The next day, they were bankrupt.

Too good to be true

Like many older adults, the Butchers entered the real estate market with family in mind. They wanted to live closer to their son, and to have a place big enough for grandchildren to enjoy.

“We were truly excited, when through negotiations, we won the bid,” Candace Butcher said. “Through the entire process, I kept saying, ‘I can’t believe this is going to be our house.”

All it took to rob them was a simple confluence: wire fraud and poor security precautions. The email that provided the Butchers with wire transfer details was sent from the proper domains for the Butchers’ pay agreement, under the proper names.

The only problem, according to the complaint and the Butchers’ attorney, was that those domains had been hacked.

Someone had gotten inside Land Title Guarantee Co. and Envoy Mortgage and used their contact information to obtain a fraudulent wire transfer.

The secret behind the hack

It’s a frighteningly simple trick: all it takes is the password to the right email account. The exact dollar amount had yet to be specified, and the Butchers had no reason to think an email from their mortgage company would be anything but legitimate. They’re currently suing both companies for insufficient security.

They’re also suing Wells Fargo, the bank handling the transfer. According to the complaint, Wells Fargo failed to acknowledge the fraud and neglected to make recourse available, including a 72-hour freeze that would have saved the couple’s savings.

Instead, while the problem is being resolved, the Butchers are living in their son’s basement.

The details of the whole sad saga can be found here, but the takeaway is simple: security is everything. Everyone cares about housing. Not everyone is an expert in data security. The real estate industry has a moral and professional responsibility to guarantee secure transactions.

Better safe than sorry

Real estate customers can avoid tragedies likes the Butchers’ by taking precautions on their end.

The National Association of Realtors provides guidelines for both. They should be required reading for anyone in real estate, but by way of a simple version:

If you’re a real estate professional, be aware of the possibility of fraud. Build warnings into your client communication structure. Better yet, educate your clients about common types of scams and what to do about them.

Better than better, designate or hire a staff member who is specifically responsible for the process, keeping lines of communication open to guarantee this never happens to you.

Don’t reuse passwords.

Don’t repeat passwords.

Clean out your email to secure sensitive information.

Instruct clients double-check everything. What happened to the Butchers started because they trusted an unverified email.

Don’t do that, ever.

When you receive instructions via email, confirm them by phone or in person, and at the risk of stating the obvious, don’t use any of the contact info in the email. Some very committed hackers will even put up legitimate looking websites. Call someone you’ve already spoken with in person, or for that matter, drop by.

New startup solves this problem

You can do all of those things and still feel insecure about the process. But we’ve uncovered a brand new real estate tech startup that is dedicated to solving this problem.

BuyerDocs can help prevent wire fraud cases like this with its simple, free, easy-to-use solution. Our service can save home buyers from losing their down payments to a scam, while also helping protect title companies from potential lawsuits,” Abigail White, Cofounder & CMO

Because the startup is brand new, it’s not yet the industry standard, but it truly should be.

Send a link to your title company and ask why they’re not using BuyerDocs to protect your clients.

Finally, trust your instincts and teach your clients to do the same. If something about the transaction feels wrong, go with that feeling and confirm.

The Butchers are working with attorneys and the FBI to resolve their fraud claim. This is how you keep from having to do the same.

#fraudsucks

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Homeownership

Real estate association launches impactful video – I’m not crying, you are

(HOMEOWNERSHIP) The dream of owning a home is under assault – one real estate association has launched a massive awareness campaign that is truly meaningful.

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real estate association video

The Ontario Real Estate Association (OREA) has launched a new site, KeepTheDreamAlive.ca to lobby locals to “keep the dream of home ownership alive.”

America is not the only nation with diminishing affordability conditions, rising prices, and limited inventory. No, Canada is experiencing a similar market, and OREA is taking action to make sure those people hoping to own have the chance to do so.

“Millennials want to own homes but it’s never been tougher to achieve,” the organization notes. “Rising home prices have pushed home ownership out of reach. All their hard work and saving just isn’t enough to compete with rising prices.”

The KeepTheDreamAlive.ca site offers homeownership statistics and makes it easy to email their candidate to express the importance of the dream of ownership.

The video is moving. Prior to watching, we assumed it was another feel-good video about how neat homeownership, but to end it in broken dreams is more realistic than what you’ll see here in America.

We hope that changes. In America, the National Association of Realtors (NAR) is extremely realistic with data and they have long been very vocal on people being squeezed out of the market. And the major real estate sites paint a sunny picture of home searching and making the dream come true, but none reach as far as OREA has, to express that homeownership is simply out of reach for otherwise qualified people.

Send a link to this story to your local and state Associations as they consider their plans for marketing outreach next year. Perhaps it’s time to empower local homeowners to contact their representatives, lest they remain unaware of the big picture.

While NAR has repeatedly noted that three things will alleviate the pressure on the market (investors putting inventory on the market, builders stepping up production, and more current homeowners opting to sell), overall awareness that homeownership is out of reach for many can put a spotlight on these conditions in each market.

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Homeownership

Consumer confidence about money is up, but not optimism about buying a home

(REAL ESTATE) Consumer confidence is way up about the economy, but many still don’t feel it’s a good time to buy – here’s the data behind this contradiction.

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In the first quarter of this year, consumer confidence regarding their personal finances and the economy rose, yet this confidence is not translating to optimism that now is a good time to buy a home, according to the National Association of Realtors (NAR) “Housing Opportunities and Marketing Experience” (HOME) survey.

In fact, positive feelings that it’s a good time to buy a home is at its lowest share in the past two years, and even lower among renters. The strongest concentration of those that did feel positive about buying are homeowners in the South and Midwest where housing is more affordable.

The survey also indicates that owners feel positive about selling, while non-homeowners are feeling anxious about qualifying for a loan and saving for their down payment.

NAR Chief Economist, Dr. Lawrence Yun says extremely challenging market conditions to start the year are chipping away at homebuyer optimism. “The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers – and especially first-time buyers – to overcome.”

“Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months,” added Dr. Yun. “Many house hunters are telling Realtors® that they are dispirited by the stiff competition for the short number of listings they can afford.”

He notes that if more homeowners decided that spring is the best time to list their home (especially after amassing equity), supply conditions would “improve measurably, and ultimately lead to more sales.” We would add that the HOME survey’s confidence indices would also shift.

Consumer confidence is up, but of particular note, non-homeowners are anxious about saving for a down payment. Nearly half indicating limited income was a primary reason, followed by student loan debt (30 percent), rising rents (28 percent), and health expenses (14 percent). Only 14 percent said nothing was holding them back.

The survey also indicates anxiety over qualifying, with 45 percent claiming the reason is income uncertainty. One in three said their credit score would hold them back, and 26 percent said they were carrying too much debt. Nearly one in three said they don’t know the first step they’d need to take in order to qualify, so a lack of financial literacy is holding a portion of the market back.

“It’s never too early for those wanting to own a home in the future to sit down with a lender to discuss their current financial situation,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Homeownership could be a more attainable goal once an interested buyer finds out how much they can afford to buy, as well as what steps, if any, are needed to improve their chances of obtaining a mortgage.”

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Homeownership

6 smart locks that will knock off your socks

(TECHNOLOGY) Smart locks are a growing part of the smart home – know these for yourself and/or your clients and you’ll be sock-less (get it?).

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lockitron

Smart locks can offer a great deal of flexibility and convenience, but there are a few things you might want to consider before installing or recommending one to a client.

Smart locks give you and anyone you choose, the freedom to come and go without carrying a key, however, that’s also the first thing you may want to consider: in order for smart locks to be “smart,” they need power. This means you’ll need plenty of good quality batteries and the foresight to change them regularly; otherwise your smart lock won’t function. 



Also, renters will need to check with the landlord before making any changes to the existing locks, as some leases do not allow you to alter your locks in any way (although there may be a sneaky way around this if folks are so minded, but please bear in mind, you could be evicted or even be breaking the law by installing a smart lock, or any lock, without permission).

Aside from these few considerations, and the rare possibility of the lock malfunctioning, the benefits for most people, over using a traditional, physical key, outweigh the drawbacks. Here are seven of our favorite smart locks on the market:

1. Kevo Kwikset Smart Lock ($215)

kevo smart lock

The Kevo Smart Lock by Kwikset is a favorite for a few reasons. First, Kevo uses a Bluetooth-based close-range authentication system (which is more secure than the geofence auto-unlocking that many other locks utilize). Kevo also gives you several different options for controlling the lock: you can use a physical key, the smartphone app, or a wireless key fob (like the one you likely use for your car).

By accessing the app, you can control eKeys, as well who has access to the eKeys. Kevo also offers a “Kevo Plus” upgrade ($100), that allows you to monitor your Kevo when you’re away from home. This includes the Kevo Plus wireless gateway for monitoring. 

To unlock your door, simply tap the top of the door lock and it will communicate with your phone via Bluetooth and unlock; if your phone battery happens to die before you get home, you can use a physical key, the fob, or log in to your Kevo account from another smartphone and your eKeys will be transferred allowing you access.

The Kevo lock uses multiple levels of encryption to increase digital security and contains Kwikset’s patented SmartKey technology, which is tested to the most stringent lock picking, key bumping, and physical security standards. Nothing will be 100% secure, but Kwikset has been manufacturing locks for more than 60 years and the Kevo is an American National Standards Institute (ANSI) Grade 2. There are 3 levels, 1-3, with number 1 being the highest rated.

2. August Smart Lock ($200)

august smart lock
Remember when I said there might be an exception for apartment dwellers and renters? The August Smart Lock is the exception. It is a good solution (remembering the caveats mentioned above) for renters who want a smart home but aren’t explicitly allowed to change their locks.

The drawback to this lock is, you’ll need a gateway, the August Connect, much like Kevo Plus, for remote access. The August replaced just the interior plate and lever of your existing deadbolt, so the exterior hardware remains unchanged.

You can also add a few accessories: a keypad, the app, and a wireless connection bridge. In order for the August to be compatible with Echo/Alexa, HomeKit/Siri, or Google Home/Assistant, you will need the Wi-Fi Bridge which is not included. There have also been reports that this lock is particularly bad at draining batteries. While it does have a few drawbacks, it is a good choice for anyone happy with their existing locks, but still looking to add a lock to their smarthome setup.

3. Schlage Connect Touchscreen Deadbolt ($230)

schlage
The Schlage Connect Touchscreen Deadbolt is the most unique smart lock on this list because you’ll never have to deal with a key or an app to use it. Instead, you use the digital touchscreen. Schlage’s lock integrates with several different home automation systems, including Amazon Alexa.

One of the most unique features about this smart lock is that if anyone tampers with the lock/door, you’ll be notified and if anyone pushes against the door too forcefully, a piercing alarm will sound and you’ll be alerted to help deter break-ins. Schlage’s lock is also the only lock in this list rated one by ANSI. If you’re looking for a lock that will still let friends and family in without giving out a code, this lock still has you covered. You can lock and unlock from nearly anywhere using Schlage’s Z-Wave® technology.

This technology was developed by Schlage in 1999 and uses wireless radio frequency (RF) communication for home devices allowing you to give access on-the-go.

4. Yale Assure Lock SL ($219)

yale smart
Yale Real Living Assure Lock SL is the slimmest smart lock on the market, and if purchased with a Yale iM1 Network Module, it is HomeKit-compatible, so it can be controlled using the Apple Home app, the Yale Secure app, and via Siri voice commands.

It’s available at major retailers, including Lowe’s, Best Buy, PC Richard & Son, and on Amazon. This lock has a reputation for ease of use and reliable integrations.

5. Lockitron Bolt ($99)

lockitron
The Lockitron Bolt is a great choice for users looking to try out smart locks, but are also a bit more budget conscious. The Lockitron is compatible with both Bluetooth and Wi-Fi.

It can be integrated and automated through IFTTT (If This, Then That). If you’re not familiar with IFTTT, we’ve written extensively about it. Lockitron is introducing what they call Key Match, so this will be another great option for renters as this will allow you to keep your current set of house keys and still use a smart lock. Soon, they will also be introducing the Lockitron Bridge so you can control your lock from anywhere in the world, giving you gateway connectivity. The Bolt is more secure than you might think, given the price tag. They use robust encryption using open, published standards. It is secured at both the protocol and application layers and if you’re worried about security, you can check their security page.

The Lockitron Bolt gives you a basic, affordable smart lock, with a sleek, easily accessible mechanism that is still secure and functional. If you’re looking for a smart lock with all the bells and whistles, however, the Lockitron Bolt, may not be your best option.

6. Friday Lock ($249)

friday
Friday Lock is a true competitor for the August Smart Lock in a sleeker design. Friday Labs ambitiously bills itself as the world’s smallest smart lock at a mere 2.7”. It is ergonomic, small, and functional for everyone. Friday lock securely connects to your phone wirelessly, giving you the ability to lock or unlock your door as you leave or approach, as well as effortlessly share access with anyone you choose. You’ll also receive notifications on your phone for every action your lock takes (every lock/unlock).

Friday Lock comes in seven colors and can also be connected with the Apple HomeKit and Secure Remote Access. It works with all single cylinder deadbolts and can easily be installed with a screwdriver. Friday replaces the thumb latch on the inside of your door, so changing out the lock is simple.

It also has a rechargeable battery in the baseplate, saving you money on batteries. While this lock is a bit on the pricey side, Friday rotates 360 degrees, making it compatible with any deadbolt. If you’re looking to add a sleek, small smart lock to your home automation, Friday is a great choice. 



The takeaway?

While smart lock technology has come a long way, there are still several things to consider before recommending one to a client or installing one yourself: do you still want to be able to use physical keys? Do you need remote access? Should it be compatible with your home automation system? Are you going to be replacing batteries or recharging them?

And for most people, can you afford to switch out all your locks at once, or will you need to do it one at a time? Smart locks certainly offer a level of convenience that cannot be beat by physical key locks, but there are some drawbacks mentioned above.

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