Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

The Inman Files: Ending 155 years of real estate scams

10/06/2017

Download PDF

I’m working on a new weekly email featuring my thoughts on the industry and more. Check out the last one, “Don’t wait for Opendoor to eat your lunch” here. Send me feedback at brad@inman.com. And if you would like this in your inbox, sign up here:

(function() { var qs,js,q,s,d=document, gi=d.getElementById, ce=d.createElement, gt=d.getElementsByTagName, id=”typef_orm”, b=”https://embed.typeform.com/”; if(!gi.call(d,id)) { js=ce.call(d,”script”); js.id=id; js.src=b+”embed.js”; q=gt.call(d,”script”)[0]; q.parentNode.insertBefore(js,q) } })()

powered by Typeform

Thirty some years ago when my older brother was climbing the corporate ladder in a Big Four accounting firm, he was relocated to the company’s New York City headquarters.

A little green in the ways of the city, he got a telephone call one Sunday afternoon from a man claiming to be an executive with a big client of the firm. He said that he had traveled to New York City from London, lost his wallet and asked my brother to help him out with travel expenses.

The sly hustler had vital information about the accounting firm, dropping the name of my brother’s boss and other pertinent company details.

Consider this was pre-cellphones and pre-internet.

How agents dominate with multichannel content marketing Win listings and overwhelm competition by mastering the art of social media, direct mail and email READ MORE

The plan was for my brother to meet him in the basement level of the fancy Waldorf Astoria Hotel on Park Ave. A company man, he was suspicious but torn by a sense of duty to help a possible client. When he pushed back, the guy guilted him about shunning a big client.

Dutiful and unable to reach his boss, my brother hopped a cab to the hotel and took an elevator to the B level, only to be greeted by a swarm of New York City police officers. The first thing he heard when he exited the elevator was “another sucker.”

A copper told my brother that he was lucky because the culprit had fleeced a number of other gullible corporate types before he slipped through their fingers.

The shady grifter unearthed enough information from corporate annual reports and the phonebook to fool a few young upstarts and make off with their money.

The police officer asked him why he hadn’t verified the “client’s” identity.

How could he have, exactly?

Three decades later, we’re getting closer to the answers — however risky and invasive they may be.

Taking the mystery out of the home sale

New authentication tools will begin to protect people (like agents showing houses to strangers). Plus, thanks to digital verification, real estate transactions will close in a blink of the eye and make the homebuying and selling process as certain and fast as buying a jumbo freezer on Amazon.

Have you signed up for the private airport security system Clear? Scan your boarding pass, put your finger tips on a scanner, take a biometrics mug shot and (bingo!) you sidestep the lines and are on your way to your gate.

Clear enrollment page

If we trust such a system to protect us from terrorists, then we can count on it to make an express home sale.

That’s stress-free security. How about stress-free home buying?

Imagine an online lead using iPhone facial recognition before meeting you at a listing. Imagine a fingerprint securing an escrow payment, verifying a house showing or approving a smart contract.

Real estate startup Trust Stamp will wipe out wire fraud in emails by using facial biometrics like Clear to prove the identity of an email sender. Its next product will provide identity verification when an agent meets up with a new prospect.

Everything from home showings, contracts, loan approvals and closings will be made simpler, safer and faster because of identity verification. Leads will not be a mystery, charlatan buyers will be exposed, open house stalkers will be busted and predators will be scared off.

Massive databases on home shoppers, sellers, agents and properties are being integrated as we speak. These data sets, facilitated by blockchain in a shared ledger, will make instant authentication even more sophisticated, reliable and safe. Data will be organized and protected more securely without the siloed database, top-down control of too-big-to-fail banks and credit houses like Equifax.

Real estate fraud then and now

Dating back to 1862 when the Homestead Act was passed, real estate has been littered with scandals that could have been avoided with proper authentication. Accelerating the settlement of the American West, the landmark law granted families 160 acres of public land for a tiny fee and for living on the property for five years.

Five hundred million acres were settled, but only 80 million went to actual homestead families, while the bulk went to speculators, miners, lumber companies and railroads.

How did they get away with it? Graft and bribes? Sure, but they also faked the true ownership chain of the property, putting claims under straw buyers without proof they actually were meeting Homestead Act requirements. The government had flimsy tools to verify who was who.

That first real estate scandal was followed by many more, including the housing market collapse in the 1930s, the mortgage redlining disgrace of the 1960s and 1970s, the savings and loan debacle, HUD scandals in the 1980s and the subprime meltdown 20 years later

Most of these messes involve loans, subsidies, funds or ownership claims going to the wrong people — and could have been avoided if authentication systems were in place.

Ironically, those scandals precipitated other crazy-making security steps like the requirement that people who secure a federally backed mortgage provide their thumbprint. These arcane steps did nothing to prevent fraud because the paper documents were tucked away in file drawers.

Current systems catch people after the fact but can’t stop scams before they happen. That is where authentication in the digital age comes in.

Consider the sub-prime crisis in the mid-2000s, which could have been avoided by authenticating borrowers. Their true financial profile was disguised by shaky mortgage brokers and misrepresentations by borrowers who made claims about income and assets. The paperwork was processed, faulty claims were missed and the aggregate debt load of unqualified borrowers and risky loans conspired to help bring down the global economy.

Bots identify crooks and scrub errors and misrepresentations better than humans.

Finally, too many real estate agents have been raped, injured or even killed because prospects are not properly authenticated at open houses and showings.

I think ninety percent of that risk will be thwarted with simple authentication tools. It’s about time.

Email Brad Inman

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • MailMatic wants to be in your 2021 marketing plans

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Inman Tech Review: JetClosing is fueling mobile adoption of digital title and escrow

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Meet the new urban buyer

    New Yorkers have a knack for spotting trends—and so do luxury real estate agents. When I am asked ...

  • Versatile online marketing solution HighNote brings it all together

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Change agents: How my former career made me a great real estate agent

    Real estate is a specialized field of work, and not every agent takes the most direct path to find t...

  • Zentap addresses all your Facebook needs in one place

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Why industrial interiors are making waves with buyers

    Industrial interior design has long been beloved by luxury homeowners. Modern and open, characterize...

  • The top 5 common anxieties for first-time homebuyers

    In many markets today, homes are being snapped up almost as soon as they’re listed—and a large p...

  • Does Zillow’s app for online tours stack up?

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Roomvu makes effective web video marketing fast and affordable

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

April 2021
Mon Tue Wed Thu Fri Sat Sun
 1234
567891011
12131415161718
19202122232425
2627282930  

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...