During the 1930s, Americans saw double-digit unemployment rates (almost 25% in 1933). The unemployed quickly burned through their savings and became desperate to provide for their families. As a result, many turned to property crime, including fraud, forgery, and burglary.
I mention the Great Depression because the real estate industry and the professionals who comprise it are now in a desperate financial situation of their own. Rising interest rates and the historic lack of housing inventory have hit the industry hard, with homes sitting on the market and both buyers and sellers hard to come by. In fact, Inman News reports that real estate transactions are down as much as 30 to 60% this year, with 60,000 purchase contracts canceled in August 2023 alone.
Think of that as a 30-60% unemployment rate for Realtors, since real estate transactions are our source of employment.
Not only does this impact Realtors’ jobs, but also all the ancillary jobs that feed off real estate — including investors. Desperate times unfortunately invite desperate measures, and this means real estate-related scams are on the rise, including title or deed fraud, wire fraud scams, foreclosure relief scams, loan-flipping scams, etc.
These bad actors prey on the most vulnerable, including divorcing couples, seniors, those whose first language is not English, and anyone who is in turbulent circumstances. Because divorce filings are public, the divorcing parties are particularly at the mercy of scammers, who often present as a wolf in sheep’s clothing. Many of their correspondence is written on fake letterhead and can come across as official and threatening, similar to phishing emails we all get from time to time.
Real estate investors are now coming out of the woodwork, making “too-good-to-be-true” offers to sellers, such as all-cash with no closing costs, no need for showings, flexible move-out dates, etc.
And while these scenarios may be extremely tempting to divorcing homeowners who need to sell as quickly as possible, they could result in tens of thousands of dollars lost forever, impacting their financial health for decades to come.
Scams like these are an unfortunate reality, but your clients needn’t be victims. Encourage them to speak with you and review any correspondence that includes a proposal or offer that is not within the scope of representation of a Certified Divorce Real Estate Expert, or for that matter, any other skilled professional trained in the issues unique to divorce.
As your local CDRE®, I am always here should you have any real estate questions that come up in your cases.
Whether you are a First Time Home Buyer, First Time Investor, Seasoned Seller, Seasoned Investor or just need some Real Estate assistance, Megan is committed to helping in any way she can.Let's Connect