Real Talk!

Over two million real estate transactions are processed in this province annually and the instances of real estate fraud are relatively low... however, real estate fraud has traditionally proved to be a reliable source of income for crooks and unfortunately, the current economic climate has brought some of the flim back to flim-flam.

"When the market is on the rise, you don't see much fraud," says Carl Pergola, fraud examiner and national director of litigation and fraud investigation services at a New York City-based consulting firm. "... once the flow of activity slows down, it starts to become evident. It's like turning on the lights and seeing the roaches running around."

"The criminal elements have realized that with a little sophistication, a little organization, they can make a lot more money than bank robbery or drugs or other areas of crime," said one Toronto real estate lawyer, recently.

The downward trend in the real estate market has brought out new tactics, along with the old as the perpetrators take advantage of our aging population and the depressed market, declining values and large number of "power of sale" actions.

The decreased market demand has placed pressure on lenders, builders and home sellers, alike. There are a lot more properties with homemade signs, "For Sale by owner", "House For Sale"..... AND, a lot of these people are forgetting that there's a lot more to selling a house than showing it and settling on a price.

Although, most often, real estate scams don't hurt property owners as much as they hit insurers and mortgage lenders, I have just recently, encountered a handful of people who made "private deals" and came to me, after the fact, for help. It appears that there are different types of real estate scams emerging and they are seriously impacting first-time homebuyers, home sellers, seniors and home owners.

Probably the most disgusting of con artists are people who have developed some level of trust in your life. The people you deal with day-to-day, neighbours, friends of neighbours, even family members, prove the most successful of con artists. & I have learned that anyone can be victimized and fall prey to a clever con artist.

We all place a certain amount of trust in our friends, family, and co-workers, but we should all remain a little skeptical about their sales or business pitches- and remember, it is seldom a good idea to rush into signing anything.

If the offer sounds too good to be true - it probably is.

Beware of a person who uses high pressure tactics or is intimidating -using phrases like: "you will lose out if you don't act now"... "you must pay immediately"... or "you must pay cash".

There are "predators" who actively seek out homeowners, typically senior citizens, who are most likely to have equity in their homes. The predator's goal: to steal the homeowner's equity through whatever fraud, misrepresentation, flimflam, trick or device that is required.
Some criminals will pose as a senior citizen, too.

Predators use door-knocking, congenial visits, telemarketing, lies, flyers, billboards, built-in security agreements, small print, hidden interest rate loans, high loan set up fees and balloon payments. Often under the guise of saving you BIGTIME.

I'll say it again: If the offer sounds too good to be true - it probably is.

Fraud is defined as: Intentional misrepresentation or concealment of information in order to deceive or mislead. It is a willful intent that is both immoral and illegal.

Sometimes, nice people convince themselves it's okay to fudge a little and even the most lovely of neighbours may be less than honest about their intentions when dealing privately with you, in a real estate transaction. It's still immoral.

It isn't always easy to spot a slick criminal.

"Forgers" and “Identity Thieves” are people that will approach you under some false circumstance (like pretending they want to buy your house or cottage) and get pertinent information like your name and birth date... and go off, to work forging quitclaim deeds, notarized documents, make loan applications... *sigh*

The catch is that we all know you have to ensure that everything is in writing. If you are dealing with a person who tries to make a verbal contract this may be a red flag... they may be somehow trying to trick you. However, it is almost scarier when someone produces legal documents and ask for your signature...

Never sign anything unless you are familiar with the document. Real estate contracts, in particular, are often absolutely crammed with clauses, conditions and terms. It takes time to look everything over and ensure that all additions and amendments have been noted.

The Law Society of Upper Canada has a website section dedicated to real estate. In the section "PRACTICE TIPS:Recognizing Fraud in Real Estate Transactions" it says, "Real estate fraud can occur in a number of different ways. The following is a list of some possible indicators of fraud in residential real estate transactions. The presence of one or more of these indicators in a transaction does not necessarily mean that a fraud is occurring or has
occurred in the transaction. This list is not intended to replace the lawyer’s professional judgment. Whether a fraud is being committed in the course of a real estate transaction will depend upon the circumstances of the individual matter or transaction." and on that list of indicators is "There is no real estate agent involved in the transaction;"

Even the law society recognizes that a real estate sales person is an important element in the transaction of selling real estate.

http://rc.lsuc.on.ca/jsp/fightingRealEstate/index.jsp

The services of a good real estate professional are invaluable. They have the skill to protect and guide you through one of the most important transactions that most people will encounter in their life time. If someone approaches you privately to make a deal, you may still contact a real estate professional or lawyer for assistance- it is prudent to have all documentation reviewed by a competent professional BEFORE you sign anything.

This one simple step... CONSULT A PROFESSIONAL....may be worth thousands and thousands of dollars.

& remember, beware of unusually friendly overtures from people trying to make a deal with you... AND if the offer sounds too good to be true - it probably is.