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Couple sues real estate agent, title co, bank over wire fraud #WatchOut

(HOMEOWNERSHIP) Wire fraud in the digital age: it happens. Is there anything that can be done about it or is everyone vulnerable?

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A simple wire transfer

It should have been a dream come true for James and Candace Butcher. They’d chosen the house they wanted to retire in, negotiated the price, and sold their home for a down payment.

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All that was left was the last wire transfer – $272,000.

The next day, they were bankrupt.

Too good to be true

Like many older adults, the Butchers entered the real estate market with family in mind. They wanted to live closer to their son, and to have a place big enough for grandchildren to enjoy.

“We were truly excited, when through negotiations, we won the bid,” Candace Butcher said. “Through the entire process, I kept saying, ‘I can’t believe this is going to be our house.”

All it took to rob them was a simple confluence: wire fraud and poor security precautions. The email that provided the Butchers with wire transfer details was sent from the proper domains for the Butchers’ pay agreement, under the proper names.

The only problem, according to the complaint and the Butchers’ attorney, was that those domains had been hacked.

Someone had gotten inside Land Title Guarantee Co. and Envoy Mortgage and used their contact information to obtain a fraudulent wire transfer.

The secret behind the hack

It’s a frighteningly simple trick: all it takes is the password to the right email account. The exact dollar amount had yet to be specified, and the Butchers had no reason to think an email from their mortgage company would be anything but legitimate. They’re currently suing both companies for insufficient security.

They’re also suing Wells Fargo, the bank handling the transfer. According to the complaint, Wells Fargo failed to acknowledge the fraud and neglected to make recourse available, including a 72-hour freeze that would have saved the couple’s savings.

Instead, while the problem is being resolved, the Butchers are living in their son’s basement.

The details of the whole sad saga can be found here, but the takeaway is simple: security is everything. Everyone cares about housing. Not everyone is an expert in data security. The real estate industry has a moral and professional responsibility to guarantee secure transactions.

Better safe than sorry

Real estate customers can avoid tragedies likes the Butchers’ by taking precautions on their end.

The National Association of Realtors provides guidelines for both. They should be required reading for anyone in real estate, but by way of a simple version:

If you’re a real estate professional, be aware of the possibility of fraud. Build warnings into your client communication structure. Better yet, educate your clients about common types of scams and what to do about them.

Better than better, designate or hire a staff member who is specifically responsible for the process, keeping lines of communication open to guarantee this never happens to you.

Don’t reuse passwords.

Don’t repeat passwords.

Clean out your email to secure sensitive information.

Instruct clients double-check everything. What happened to the Butchers started because they trusted an unverified email.

Don’t do that, ever.

When you receive instructions via email, confirm them by phone or in person, and at the risk of stating the obvious, don’t use any of the contact info in the email. Some very committed hackers will even put up legitimate looking websites. Call someone you’ve already spoken with in person, or for that matter, drop by.

New startup solves this problem

You can do all of those things and still feel insecure about the process. But we’ve uncovered a brand new real estate tech startup that is dedicated to solving this problem.

BuyerDocs can help prevent wire fraud cases like this with its simple, free, easy-to-use solution. Our service can save home buyers from losing their down payments to a scam, while also helping protect title companies from potential lawsuits,” Abigail White, Cofounder & CMO

Because the startup is brand new, it’s not yet the industry standard, but it truly should be.

Send a link to your title company and ask why they’re not using BuyerDocs to protect your clients.

Finally, trust your instincts and teach your clients to do the same. If something about the transaction feels wrong, go with that feeling and confirm.

The Butchers are working with attorneys and the FBI to resolve their fraud claim. This is how you keep from having to do the same.

#fraudsucks

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Homeownership

3D-printed homes that are up to code, coming soon to America

(REAL ESTATE) The first ever 3D-printed home has been created that is up to code in America – it’s affordable, and could crush the elitist tiny home movement.

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This is America – you know it’s not cheap to build a house these days. In fact, HomeAdvisor reports that the current U.S. national average cost to build a home comes in at just under $300,000, or about $150/square foot for a 2,000-square-foot home.

Sadly, this price is out of reach for many Americans’ budgets, so what are those with limited funds supposed to do?

One answer in recent years has been the tiny/manufactured/prefab house industry, a trend toward homes with smaller footprints with roots in the minimalist and green-building movements. But this option is not without its obstacles, often pertaining to jurisdictions not keeping up with the code and zoning issues surrounding these smaller, sometimes off-grid homes.

And another issue has popped up: Some of these so-called “tiny” homes are still relatively quite expensive per square foot and can take a long time to build (for those going the custom route). In fact, many believe that tiny homes have become a badge of honor for elitists.

These limitations and obstacles seem to have left a wide-open hole in the market for fast-built, low-cost homes that could eventually be built on a mass scale. Enter ICON, a construction technologies company based in Austin, Texas, whose website says it is “leading the way into the future of human shelter and homebuilding using 3D printing and other scientific and technological breakthroughs.”

The company announced last year that it has built the first permitted, 3D-printed house on site in the United States.

The 350-square-foot home was created in approximately 48 hours of total printing time and for around $10,000 (printed portion only). ICON predicts that the production version of its printer, which they named the Vulcan, will be able to print a single-story, 600-800 square foot home in under 24 hours for less than $4,000.

But you won’t be able to buy your own 3D-printed home from ICON quite yet. The company currently isn’t working with individuals, choosing to focus on its partnership with the nonprofit New Story. Together, they plan to tackle housing shortages around the world. In fact, the Austin house serves as a prototype for the work they plan to do.

While there is some (understable) criticism of the tiny home movement — mostly due to the more elitist, ridiculously expensive trends making waves in the industry — what ICON is doing seems like a major step in the right direction.

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Homeownership

Recent survey says great time to buy/sell a home is now/not now?

(HOMEOWNERSHIP) Are people ready to buy a home? The most recent NAR survey explores this and other questions, and of course the answers vary

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The National Association of Realtors® (NAR) conducted a poll during the final quarter of 2019 and the results are in: more than half of Americans believe it’s a good time to buy a home.

In fact, over 70% of individuals born between 1925 and 1964 (the silent and boomer generations) report that they believe it’s a great time to buy. Of course, part of this likely has to do with the continued decrease in mortgage rates, which makes buying a home a less expensive process.

Doctor Lawrence Yun, chief economist of the NAR, says these attitudes towards home buying are also influenced by the strong economy. With the economic conditions improving, many also make the assumption that the housing market is turning around in their favor as well. Not to mention, the strong job market has made relocating a more feasible option for many – meaning more homes to buy and sell.

And speaking of home sales: many also believe now is a great time to sell a home. Granted, this perspective seems to be skewed in favor of those with incomes over $100,000. Of that demographic, over 80% reported confidence in selling their home.

That said, this optimism is far from universal.

Those earning less that $100,000 per year were less likely to believe the economy was improving, which isn’t too surprising. Furthermore, those from urban areas were less likely to have an optimistic outlook on the economy compared to people who lived in rural parts of the country. This might have to do with the housing prices in urban areas increasing at a faster rate than housing prices in less populous regions.

Of the demographics, millennials (born between 1981 – 1996) are the least likely to report an optimistic economic outlook and the most likely to believe housing prices will increase in their communities. Then again, makes sense why the people entering the job market during the aftermath of the 2008 recession might look at the glass as half empty.

NAR’s survey covered 2,707 households across the nation and was conducted by TechnoMetrica Market Intelligence between October and December of 2019.

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Homeownership

Historic Mansion is demolished, pointing out flaws in protections

(HOMEOWNERSHIP) West Mansion in Houston almost makes it 90 years before being demolished; this points out some issues in historical preservation protections.

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“No money will be spared to make this one of the showplaces of the country,” declared Joseph Finger, architect of the West Mansion. Constructed in Clear Lake in 1930, West Mansion’s had a unique 89 years – housing everything from the Lunar Science Institute to the luxurious Dr34m display – but that came to a close with its recent demolition.

The mansion was in good structural condition, was listed as a Historic Landmark and had even been ranked on Preservation Texas’s “most endangered” list in 2007.

So, why did it get demolished?

First, it’s worth understanding that West Mansion has been on the chopping block before. The original owner, James M. West Sr., initially built the mansion as a centerpiece of his sprawling ranch. Still, he sold the mansion, along with the ranch, a mere 8 years after it had been constructed.

The mansion remained unused for over 20 years.

From 1961 – 1992, West Mansion became the Lunar Science Institute (later renamed Lunar Planetary Institute), at which point it was sold with the restriction that it had to be preserved for twenty years. Although many groups tried to fight for it to be preserved longer, none could raise the money necessary for extensive preservation.

West Mansion was once again at risk of demolition in 2012, but the current owner (Rockets player Hakeem Olajuwan) instead opted to renovate the home and use it as a place to showcase his luxury clothing line, Dr34m.

Although groups like Preservation Houston continued to work towards keeping this historic landmark, Olajuwan was able to schedule and demolish in under a month.

This move came abruptly. Pasadena, the city where West Mansion resided, has no preservation ordinances for historic structures. Although outside organizations have offered incentives for owners of historical structures, there was nothing stopping owner Olajuwan from tearing it down without any public notice.

Worse, according to David Bush of the Greater Houston Preservation Alliance, there was no attempt made to salvage any of the material, much of which was expensive and easily recyclable.

West Mansion, which had grown to become more than simply a landmark of Texas wealth, will certainly be missed. There is also a lesson in the West Mansion demolition: while non-profits can work hard to preserve historical structures, it also comes down to residents working to ensure there are local protections in place.

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