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FRAUD

A surprisingly busy start to the year combined with a little writer’s block & here I am at the end of January finally hitting publish on my first blog post of the year!


FRAUD has been all over the news for the past few weeks thanks to 2 high profile cases of fraudulent real estate sales. For some reason this topic has been a tough one to wrap my head around & mostly it’s about what do I want to say about it? What is the point that I want to make? What value can I add to the conversation?

 

  • Regurgitate the news articles that have already been written with some added commentary?
  • Provide deeper context beyond the sensationalism of the news headlines?
  • Lament the fact that fraud seems absolutely rampant in every facet of our lives (the over-dramatic hot take)?
  • Ways to protect ourselves?

 

And that’s where I finally landed – how do we protect ourselves? And a bit about how rampant it is, from the little white lies to the really bad stuff…

 

A day in the life of a REALTOR can run the gamut from simple deception to outright fraud, and I’m talking about experiencing it NOT perpetrating it, lol! So we can be a little jaded sometimes…from one end of the spectrum to the other, here are some examples:

 

  • Signing up on my website with fake credentials costs me money (Google PayPerClick money) with no hope of recovering it by potentially signing a new client
  • Signing my open house sheet with fake credentials creates liability for me & no recourse for my clients if there is theft at their home during the open house. The anger & intimidation we're often faced with when we ask for ID is crazy too!
  • Lying about whether you’ve already entered into a representation agreement with another realtor when you want something from me…costs me time, sometimes money & worsens my trust issues (lol)
  • Sending me fraudulent documents creates liability for me, costs me credibility with my colleagues if they get past me & wastes my time…and others’ time as well.

 

Not real estate related, but I ran a softball league for adults for many years & from what they would lie about to how they would behave when they didn't get what they want...talk about a study in human nature, lol!



 



But then we get into the next level crap (which I’m thankful that I’ve never gotten caught up in)!

 

  • Mortgage Fraud - lots of shady sh#t  in this CBC Marketplace investigation - Watch it HERE 
  • Hacking of lawyer and/or mortgage broker email addresses in order to divert funds/information

 

DRAR Members...As many of you know there have been numerous reports of fraudulent activity within the real estate market recently. This is a reminder to please remain very diligent during the transaction.  There have been reports of email addresses from lawyers or mortgage brokers being hacked and changed resulting in individuals unknowingly transferring money or information to an incorrect email address. Small changes in an email address are easy to miss and a sneaky way to commit these fraudulent activities. Please encourage your clients to always contact the original source and to contact you as the salesperson if they have concerns during the process  - Durham Region Association of REALTORS, January 28, 2023 

 

And then we’ve got the “Big Baddy” which is the FRAUDULENT SALES that were all over the news earlier this month!

 

See the stories HERE &  HERE


The (short version) of the likely outcome, according to a lawyer, is as follows:


In this instance, two innocent parties, the original owner and the new buyers both have a claim to title. So...who ends up with the home? Based on the Legal Concept of the Indefeasibility of Title it "should" resolve as follows: 


  • The original owners, with the law on their side, go to court and seek a vesting order that will likely be granted and reclaim their property.
  • The buyers will be made whole financially through their title insurance which covers these events.

 

So with all that build up, how do we protect ourselves?

 

As Professionals, we need to KNOW OUR CLIENTS! Because if we’re not checking out our clients thoroughly & they commit fraud, then it could be assumed that we were aiding & abetting them. It’s literally our job! Not to mention the fact that otherwise we could be wasting our time, the other agent’s time, the seller’s/buyer’s time, risking our reputations, lawsuits etc!

 

Some best practices would include:

  • Pull parcel registers
  • Have a lawyer as part of your team to investigate liens & anything else of concern on title
  • Ask to see original purchase documents
  • Compare photo IDs to available pictures elsewhere, such as on social media
  • Compare original purchase date to current age of the sellers; ie, a home purchased in the 1970’s would not be sold by a 30yo without other factors at play than can/should be verified

 

Clients, aka Buyers & Sellers, need to realize & come to terms with how invasive a process it is to ensure that all parties are protected. I don’t particularly want to read your separation or custody agreement (just as an example), but I might need to in order to further your interests or protect the integrity of the transaction or limit liability. And it should go without saying, but be honest! Behind in your property taxes or income taxes? The professionals who are assisting you need to know ALL the facts to best know how to help you!

 

Best practices for you would include:

  • Register a lien on title such as a HELOC
  • Title Insurance is a MUST
  • Safeguard your ID
  • Know what your Home Insurance requirements are about leaving your home unattended
  • Keep in touch with your neighbours as they can be an early warning signal that something is amiss
  • Follow other common Identity Fraud Safety Tips

 

The conveniences of our digital world also come with downsides & mistakes do happen, & that’s why professionals carry Errors & Omissions insurance. But if everyone, including YOU is working together, doing the due diligence that’s needed to safeguard what’s likely your biggest asset, then you’re certainly lessening the chance that YOUR story is the next sensational news headline…

 

Until next time,



How the MLS® Works

The latest Realtor.ca Insights Report was just released & inspired the topic for today's post.


First, let’s start with some messages I’ve received recently:

Thought you'd send cheaper places, I see all these on realtor.ca


Where is the rest of the information about this house


Where are the photos?


Maybe you’ve had similar thoughts & questions, so let’s talk about how the MLS® works:


  • When a seller signs listing paperwork they can choose to be “exclusive” or on the MLS® - exclusive listings are NOT on the MLS®

  • MLS® listings are then uploaded to a data system operated by a real estate board – different boards use different data systems

  • Each real estate board then sends the listings to CREA (The Canadian Real Estate Association)

  • CREA owns the MLS® trademark logo & also administers & owns the mls.ca & realtor.ca websites for the public

  • Through data sharing agreements (DDFs), listings are then distributed by CREA to websites like mine, other 3rd party sites like Zolo & HouseSigma & of course, Realtor.ca

  • Bottom line is that if it’s an MLS® listing, then that listing is going to be on thousands of sites – YOU choose what site you’re going to look at it on

  • And the information is only as good as what was input into the data system in the first place – which means that if the listing agent didn’t include pictures in their submission, then there aren’t any available. Very rarely it means that there’s a glitch with the data transfer at the board level or at CREA & once that’s fixed, the pictures will be visible.

  • Why would an agent not include pictures? The most common reasons are that the property is tenanted & they haven’t allowed it, or it doesn’t “look” good in some way. No picture of the kitchen or bathrooms? They’re probably not renovated…

  • A few honourable mentions when it comes to “the information is only as good as what was input”:

    • We are limited to a list of specific key words when it comes to features & finishes of a property – for example, “granite” is a key word that’s available for countertops, but “quartz” isn’t. These key words are what allow a listing to be captured in a search

    • Not every field in the data submission form is mandatory – square footage & age of the property, to name a couple – which will make search results incomplete if you try searching by that criteria

    • In the “remarks” & “extras” sections of a listing we have free reign to write whatever we want

    • There are 2 “remarks” sections, 1 that the public can see & another that is only for agents

    • The data system software automatically capitalizes the first letter of each word – that’s not us, lol!

    • A human is inputting the listing data into the system, so mistakes do happen

 

So there you have it, a peek behind the curtain of how the MLS® works - from listing paperwork being signed, to the listing ending up in your inbox or on your screen each day! 


Until next time,







If you’re up for some additional reading, check out these links:

Breaking the month of November down in my Durham Housing ReportHERE


REALTOR.ca Insights Report – HERE

 

Tales from the Trenches : Theft



Seriously!


A colleague recently posted in our realtor group about something that happened to their client who just purchased their home this summer...


Someone stole their central air conditioning unit! Cut the wires & hauled it away from the side of their house!


And they don't know exactly when it happened, because who's checking the air conditioning unit outside once it's turned off for the season?! Not me, that's for sure!


The more you know, the more you can protect yourself - share what you know & help protect others too!

 

Here's what I learned from the 55 responses in that thread that made me think that this was a good PSA to share:


Their insurance company is asking for proof that there was an air conditioning unit in the first place - specifically service records & the purchase receipt. They've only lived there since the summer so they don't have those things & the sellers/previous owners probably don't either, because why would you keep them when you don't own the property any more?! The MLS®  listing & Home Inspection report both refer to there being a central air conditioning unit, but that doesn't seem to be enough "proof" for the insurance company in this particular case.


Apparently this is a fairly common occurrence in the US - they even make cages to put over the units that are then bolted to the cement slab. And we've all heard the stories about thefts at construction sites all over the province, but now they are becoming more prevalent in our developed residential neighbourhoods as well. In the course of this online thread there were incidences reported in a Hamilton neighbourhood this summer & in a "small Ontario town" this past winter. The original incident that prompted this post was in the Warden & St Clair area of Toronto, last week!


Building materials, copper wire, mechanical systems...everything is fair game these days! I even heard recently about all the (installed) plumbing being cut out of a vacant house, how crazy is that????


So what can we take away from this situation & others like it?


Check your property on a regular basis, take pictures of all your stuff, write down serial numbers, keep records of repairs & purchases, if you have the means, install cameras or monitoring systems.


If you're purchasing a home, it's a good practice to have pictures & serial numbers of big ticket items that are supposed to be included in the sale, in case the sellers decide to swap them out for something else - yes this does happen!


Put away your valuables for showings & open houses because yup, that can be a problem too! :(


If it feels like there's a new scam to worry about every day, you're not alone! And it can feel very heavy at times, as we add new things to the already long list of things we have to watch out for...All we can do is the best we can, with the information we've got, & try to stay focused on the good stuff!


Stay aware, stay safe & enjoy the ride my friends!


Until next time,