Homebuyer Desperation Is Leading to a Rise in Real Estate Fraud
Homebuyers and sellers navigating a volatile housing market are more susceptible than ever before to housing fraud, especially as tight conditions spark desperation among those trying to close deals as quickly as possible. The risk for property fraud involving misinformation from sellers increased 23% in the second quarter of 2022 from the year prior, while transactions where wire and title fraud were a risk factor reached an all-time-high in the fourth quarter of 2022, Insider reports.
Elevated borrowing costs are making it harder for sellers to entice buyers, a scenario which scammers are taking advantage of by offering fraudulent deals promising prime real estate at an unbeatable cost, a deal literally too good to be true, but a strategy nonetheless effective at luring in last-ditch buyers.
Higher interest rates and sluggish housing activity create more pressure for real estate professionals to close on a deal, which can mean they're not properly verifying if an email or a text is from a legitimate sender.
"Chaos creates a perfect time for cyber criminals to take advantage of these, especially in the housing industry," [Ike Suri] said, adding that each transaction between parties is an opportunity for a fraudster to strike.