Email Fraud – Spot Them with These Red Flags

by | Dec 4, 2015 | Legal Tips

I am sure many of you have received an email from an international buyer who wants to purchase one of your listings for cash. Typically the listing has been on the market longer than average. After the feeling of euphoria leaves you and you look closer at the transaction things don’t seem right. There is a reason for that feeling.

Typically, the email is an attempt to steal money from your trust account. How it works is the buyer will overnight you a signed contract, passport photo and cashier’s check for the earnest money. You deposit the earnest money check and a few days later the buyer exercises the right to cancel the transaction. The buyer then sends you wiring instructions for return of the sizable earnest money check. You wire the funds only to find out later that the certified check was fraudulent and dishonored. However, you have just wired your own funds back to the international buyer with no ability to recall the wire.

Here is a short list of red flags:

  • Client is international usually from the Far East, France or Africa.
  • The buyer makes a full price offer.
  • The buyer does not want their own real estate agent.
  • The buyer has never seem the listing in person.
  • The buyer wants to put down a sizable earnest money deposit or send you the total purchase price at or near contract signing.
  • The buyer is paying cash.
  • The email discusses how much money the buyer has and how they got it (usually inheritance).
  • The greeting to you is “Dear full name” or “Dear Realtor”.
  • The buyer wants to close without being present.
  • The buyer wants to close quickly.
  • The house has been on the market for a long period of time and a full price offer would seem unlikely.
  • The buyer immediately asks you for the name of a title company to close the transaction.
  • Other agents in your office also got similar emails.
  • It seems too good to be true.

Figuring out which offers are legitimate is not too difficult. Simply tell the buyer that your real estate company requires all international clients to wire funds in such a manner that the wire may not be recalled by your bank and that should they cancel the transaction the funds will only be released once the other parties signs the release and your bank confirms that the funds have seasoned. If the buyer is a criminal you will never hear from them again.

When in doubt, talk to your broker or contact me!

Today’s historical fact: Blanding Street was originally named Walnut Street after the tree commonly found in Columbia. The name was changed to Blanding to honor Colonel Abraham Blanding, a civil engineer and lawyer who designed the first Columbia waterworks.

Have a wonderful weekend.

Photo by Joe The Goat Farmer

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