GRAND RAPIDS, Mich. — The struggles of buying a home have been extensively covered. From low inventory to high interest rates, the challenges can make buying a home a labored process.
When Stacey Robach, a realtor for ReMax, shows a home it's no longer just about layout and aesthetics. With low inventory and high interest rates, finding a perfect home for her buyer is as hard as it has ever been. Many clients will often waive inspections to sweeten an offer, which means showings these days aren't limited to how it looks.
"I'm a pretty hands-on Realtor," Robach said. "We even do an exterior walk that isn't just 'oh, look at this pretty lot.' It's 'let's look at the siding. Let's look at the foundation.'"
One danger lurking in the shadows that an inspection wouldn't even find, is wire fraud. It's a growing and very devastating reality for people across the country and in West Michigan.
"There's something bad out here that could affect your life savings and your life savings could be gone within a matter of seconds," Tom Cronkright explained the effect of wire fraud.
As the CEO of Sun Title in Grand Rapids, Cronkright combats wire fraud every day. At the bottom of every one of his email communications he has a wire fraud warning.
Similarly, Robach has her clients sign a warning document before even writing up a purchase agreement.
Real estate wire fraud works through a tactic the FBI calls "Business Email Compromise." A scammer posing as a title company uses what looks, on the surface, like a legitimate email to get you comfortable with them.
Cronkright says BEC is a social engineering phishing scam. The scammer socially engineers somebody into believing that the email can be trusted, and the victim gives up their account credentials, and it doesn't matter who's exposed in the transaction.
"Right at the right time, if it's a buyer, they'll impersonate the title company for the sole purpose of redirecting that wire into the fraudsters hands," he added. "And when I say it's prevalent, you're talking about hundreds of millions, if not a billion dollars a year getting lifted off the real estate sector every single year."
The scammer, in a sophisticated process can create synthetic identities of all parties involved. The average loss they see, with rising housing prices, is $350,000.
"We've had some very dark and challenging conversations with victims because you feel, and I felt that way; you feel violated, feel ashamed, you feel like you did something wrong."
Cronkright has felt that pain personally. in 2015 his title company was in the process of closing on the sale of a gas station when the company attempted to wire funds went to the seller but was intercepted by an international money launderer.
The office lost $185,000 to a wire fraud scam.
While Cronkright's business survived and even testified against a global cybercrime syndicate, a first-time home buyer may not ever recover. That's why Cronkright and Robach take the threat so seriously.
"If you're not informed initially and you are oblivious to the potential, then your odds are that you could be a victim of this," Robach added. "That's why knowing about it ahead of time is of the utmost importance."
Because of Cronkright's personal story and prevalence of wire fraud, he co-founded a program called CERTIFID. He says it's a leading technology that defends against real estate wire fraud by confirming identities of those involved and securely transmitting wiring instructions.
It's used in about ten-percent of transactions nationally.
Here are other ways to protect yourself:
- Match the email domain to the trusted company. Look for emails that may have a gmail domain name or dashes or numbers that look out of place.
- Verify first with the source of the request before transferring funds.
- Don't accept wiring instructions over an email, text, or even a postal service.
- Walk away from high-pressure tactics. Scammers will threaten the loss of a transaction or home.
