Monica Staaf is the longtime general counsel for the Rhode Island Association of Realtors, where she’s responsible for answering legal questions and staffing the organization’s legal hotline, which answered 201 calls in January 2023.
A graduate of the Boston University School of Law, Staaf produces legal update videos on YouTube for the association. On top of that, she is also involved with crafting the content of the organization’s forms, along with forms used for the Rhode Island Statewide Multiple Listing Service.
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PBN: What can you tell us about how fraud and scams impact the Rhode Island real estate industry??
STAAF: Real estate transactions can involve large wire transfers, which can make real estate an enticing target for cybercriminals. Scams can result in homebuyers and tenants losing thousands of dollars.
PBN: Can you give an example of one of the types of scams that criminals are using that relates to real estate?
STAAF: Six different Realtors and an attorney have recently contacted me about versions of a vacant land scam. A scammer poses as a landowner and contacts a real estate licensee to have them list it for sale. The “seller,” who can’t meet in person because he moved away or travels on business, signs the listing contract and purchase and sales agreement electronically. They also plan to sign closing documents, have them notarized and send them by express mail to the closing attorney. If the closing had taken place, the buyers would have lost tens of thousands of dollars. Thankfully, none of the six scam attempts resulted in a closing because the real estate licensee became suspicious, or a family member or friend of the true owner asked why the land was for sale.
PBN: Can you tell us another scheme that consumers and Realtors should be wary of?
STAAF: Another scam is what the FBI calls “business email compromise.” A criminal will hack into a business account to access communications with a buyer about a pending real estate purchase. They will then send the buyer an email that appears to come from a closing attorney, title company or real estate brokerage that is involved with the transaction. The email instructs the buyer to wire additional funds due to the closing attorney’s bank account. Unfortunately, the number provided belongs to the criminal. What makes this convincing is that the hacker may have the true payoff figure, the address of the home that is under contract, and/or the names of the closing attorney, buyer and broker. Homebuyers should never wire funds to anyone without first telephoning the name of the law firm or title company. The buyer should not call the number listed in the email or reply to that email.
PBN: What’s your advice to real estate agents out there about protecting themselves and consumers from such a scam?
STAAF: Here are just a few of the tips that we have shared with our Realtor members: Check municipal assessment records for the name and address of the property owner. Ask to see a government ID, utility bill, tax bill, etc., that matches that address. Schedule a time to speak on the phone and/or Facetime or other form of videoconferencing. Check social media for photos or information about the seller and compare the details of the correspondence to the caller. Keep current. The FBI’s Internet Crime Complaint Center, the National Association of Realtors and the Rhode Island Association of Realtors all publish alerts about real estate scams. Property owners and Realtors can set up a Google alert with the property address to track whether someone is trying to market the property without authorization.
PBN: What else should Realtors do to make sure they are not dealing with phony sellers?
STAAF: Scams continue to evolve and become more sophisticated. Cybercriminals will continue to change their scams, so it’s important for us all to keep in mind the adage “If it sounds too good to be true, it probably is” holds true. Also, Realtors and other business owners can purchase cyber insurance coverage and have their computer system checked for viruses. Even if Realtors and their clients use due diligence, fraud can still occur. If it does, the victim should contact their bank to try to stop the wire transfer, as well as the FBI as soon as possible.
Marc Larocque is a PBN contributing writer.
