Escrow is meant to protect both the seller and the buyer by getting a third party to hold on to the real estate funds until the home-buying transaction is complete. However, some unscrupulous people may use the escrow process to trick hopeful home buyers into accidentally giving away all their savings. There have been many instances of fraudsters pretending to be legitimate organizations and then pocketing all the funds themselves. Whether they’re looking at penthouses, lofts, or condos for sale in downtown San Diego, home buyers should follow these tips to avoid getting caught up in this sort of scam.
Research Any Escrow Company Before Picking It
A common scam involves a fake escrow company set up to look legitimate but is actually a fake. To spot these companies, take the time to do a little research. Look for reviews and endorsements from reliable sources, and make sure any security seals and certifications are authentic.
Work with an Experienced Licensed Realtor
Escrow fraud is more likely to happen to people who are trying to handle everything themselves. Someone who is a member of the National Association of Realtors or another reputable professional organization should have a network of trusted escrow services they rely on. These realtors can tell you what to expect and how to handle escrow so you’re less likely to be fooled by scammers.
Be Wary of Phishing Scams
Phishing usually involves sending an email claiming to be from a reputable escrow company and asking you to provide personal information by either replying to the email or following a link in the email. No real escrow company will ask you to provide private information such as this. If you do get an unexpected call or email asking for private information or fund transfers, contact the company directly to make sure the request and routing information comes from them.
Never Wire Funds to an Individual
Closely examine the way the escrow company asks you to send them your funds. No legitimate company will ask you to send money directly to an individual, especially not with person-to-person money transfer services such as Western Union. Instead, they’ll have you send the money from your bank to a bank account for their company. You can get your bank to see where a wire transfer is being sent and request notarized wire instructions for added security.
Select a Service with Strong Cybersecurity
Even if you pick a reputable escrow company and avoid falling for fake emails trying to get money and personal information, your money could still end up being stolen if hackers target the escrow company and steal the money from them. To avoid this concern, talk to a company about their cybersecurity before you decide to work with them. Make sure they have robust security that can stop common hacking techniques.
Nowadays it seems like there are scammers everywhere you look, so it’s important to keep your guard up, especially when it comes to transactions as important as buying and selling real estate. Working with trustworthy, reputable professionals is another way to avoid falling victim to fraudulent schemes. You can trust the experts at 92101 Urban Living to give you reliable, straightforward advice about buying and selling real estate in downtown San Diego. Call one of our friendly agents today at 619-649-0368.