Real eState
Homebuyers targeted by fraudsters impersonating real estate lawyers
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Industry professionals say cases of fraud are becoming increasingly common as more processes of real estate transactions take place online, and as fraudsters become increasingly tech-savvy.Evan Buhler/The Canadian Press
Mortgage brokers and real estate lawyers are warning homebuyers of an emerging form of fraud in which criminals impersonate a lawyer through e-mail and convince people to send their down payments to fraudulent accounts.
In one case, mortgage broker Darren Lacy, who is based in Ajax, Ont., said fraudsters managed to hack into a real estate lawyer’s e-mail and used it to convince his client to wire $82,000 of a down payment to a fake account.
Mr. Lacy said his client was saved by a bank teller who found it suspicious that the lawyer asked for a wire transfer instead of a bank draft, and called the lawyer’s office to confirm whether they wanted the down payment.
In another case, Whitby, Ont.-based mortgage broker Denise Laframboise said one of her clients lost $88,000 when she received correspondence from an e-mail that looked very similar to her lawyer’s. Ms. Laframboise said her client only realized the e-mail was fake more than a week later.
Ms. Laframboise said her client’s financial institution said the transfer was made willingly and that there was nothing they could do to reverse the transaction.
Industry professionals say similar cases of fraud are becoming increasingly common as more processes of real estate transactions take place online, and as fraudsters become increasingly tech-savvy. They say the form of fraud involves criminals surveilling e-mail exchanges over a lengthy period of time before they impersonate real estate lawyers as the time comes for a down payment to be transferred.
Mr. Lacy had never previously seen fraudsters try to steal down payments through e-mail interactions before the pandemic. “The idea that this has happened to me twice in the last six months … it is happening more often,” said Mr. Lacy.
Ms. Laframboise said this form of fraud is likely a hiccup as more parts of real estate transactions happen virtually. Brokers and lawyers say that wire transfers and direct deposits are becoming a more common way to send down payments to your real estate lawyer, but said requests for that money will usually be discussed in a phone or video call first.
If you have any bad feelings about a request for money, the best course of action is to pick up the phone and call your lawyer through a number you’ve used before to ensure you’re transferring funds to a legitimate account, they say.
“As we do everything online, this kind of fraud is becoming more likely,” said Ms. Laframboise. “It used to be completely absurd to not meet your lawyer in person before COVID-19. Now we’ve transferred to Zoom, and people are more accepting.”
Toronto-based real estate lawyer John Aruldason said professional insurers and industry associations have been issuing warnings about the form of fraud in recent months.
Mr. Aruldason said one recent case study provided by an insurance company involved the sale of a roughly $30-million commercial property. Hackers were able to get into the e-mail account of the seller’s lawyers and watched a lengthy correspondence between the buyer and seller’s lawyers until they chose an opportune moment to send a fraudulent bank account number for millions of dollars to be transferred into.
Mr. Aruldason said that even though lawyers were involved in both sides of the transactions – and the buyer’s lawyer attempted to confirm the bank deposit details with the seller’s counsel – money was sent to the wrong account before being filtered to dozens of other overseas bank accounts.
Since lawyers were involved in both sides of that transaction, professional insurance companies were able to compensate the buyer.
However, in residential sales when a buyer is sending money themselves, Mr. Aruldason and Ms. Laframboise warned that there is no form of insurance that’ll cover them and buyers have to do their due diligence.
People affected by such forms of fraud have begun to take extra precautions, such as one firm that Mr. Aruldason worked with which details its standard practices for exchanging money at the bottom of every single e-mail.
“There’s a heavy reliance on online communication, but a lot of this fraud can be mitigated by speaking to your professionals,” said Mr. Aruldason.
Mr. Lacy’s client, who was saved by an inquisitive bank teller, has started incorporating a secret word in every single e-mail between them and Mr. Lacy to verify their identity.
The process of purchasing a home can be chaotic and stressful, but Mr. Lacy urged people to pick up the phone and call their real estate agents, mortgage brokers or lawyers any time they’re being asked to do something that feels suspicious, such as sending personal information or large sums of money. He said verbal confirmation can be the easiest way to spot fraud.
Ms. Laframboise said homebuyers should also try to confirm that the e-mail is being sent from a proper e-mail address, not one that is similar to the professional they’re working with. People who are suspicious of any correspondence should call their broker or lawyer through an existing contact in their phone or a number listed on Google, she said, rather than one listed in a suspicious e-mail.
She added that people who realize they’ve sent money to a fraudster should contact their bank as quickly as possible – she has heard of one case where a bank was able to freeze the money transfer because a home buyer realized their mistake immediately.
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Western Investor is famous for the breadth of its commercial real estate listings. It is perhaps the only publication in Canada where investors can find a high-rise office tower, a remote waterfront lodge, a golf course, an industrial warehouse or a small-town bowling alley for sale within its pages.
We often have unique listings and there are three this month that stood out.
First is an entire city block for sale in downtown Calgary.
The 2.83-acre site borders the popular East Village, and the land is rezoned for a high-density mixed-use project with a generous floor-ratio-area (FAR) of 20.
Flexible commercial zoning allows for residential rentals, condos or hotel and a variety of commercial uses. Current visions include four high-rise towers, but all options are on the table. It is listed by Goodman Commercial, Vancouver, and NAI Commercial, Calgary, at an asking price of $32.4 million.
Second is a rare listing in B.C.’s Central Okanagan.
The property is the 11.3-acre Vibrant Wine vineyard estates in east Kelowna. The property includes a luxury 9,000-square-foot Italian-style villa. The eight-acre vineyard was named the No.1 winery on Trip Advisor and its product was ranked the Best White Wine in the World in 2013. A proven venture that can be expanded, the entire property and equipment is co-listed by HM Commercial and Jane Hoffman Realty, Kelowna, at $13.5 million.
Third of the unique listings is a productive gold mine.
With a private residence and a two-title acreage in the Cariboo, the property covers 3.2 acres near the original Gold Rush town of Likely, B.C.
The land includes an updated three-bedroom house, but the attraction is the operating gold mine. A two person operation on a five-year renewable permit that covers a 100-acre bench, only nine acres have been worked so far, but there has been a consistent average return of 1 ounce of gold per 100 yards mined, with the highest return of 8 ounces in under 100 yards. Note: the price of gold now is around US$1,980 per ounce. The entire operation, including all the mining machinery, is listed by 3A Group, Re/Max Nyda Realty in Agassiz, B.C., at $1.45 million.
Real estate experts paint a cautiously optimistic outlook after a year of downward market trends across the country.
Trends in Simcoe County show an increase in viewings and buyers re-entering the market after key interest rate hikes from the Bank of Canada warded off many last year.
Lance Chilton, the broker of record at Re/Max Hallmark Chilton Realty, calls the local market “more or less balanced.”
“Inventory conditions are the same as they once were in 2018,” he noted.” From 2020 to 2022, prices rose to about 43 per cent, which was rather rapid.”
Chilton said key interest rate hikes eventually bottomed out the local market by about September – that’s when home prices that peaked at around $1 million dropped to about $730,000.
“Since then, it’s recovered by about five per cent,” Chilton said. “In fact, we actually saw showings increase for the first time in about six months.”
The Barrie and District Association of Realtors (BDAR) confirms that showings have picked up again, with people getting that “spring fever.”
However, the one key issue that remains is low inventory.
“We saw prices dip because of interest rates and people pulling out of the market, but we never saw that supply come back online,” said Luc Woolsey, BDAR president, adding the situation creates multi-offer bids.
“So there’s still a lot of people having to come in firm, waiving conditions and inspections because they’re having to compete.”
Real eState
‘Million Dollar Listing’ star warns CA mansion tax will deliver ‘hardest hit’ to market since 2007 – Fox Business
‘Million Dollar Listing’ star and agent Josh Altman discusses the impact of California’s housing policy and homeless crisis on the state’s real estate market.
Though it’s home to some of the most luxurious and expensive real estate listings in America, California is readying to pass a housing bill that one “Million Dollar Listing” agent warned could create the “hardest hit” to the market since the 2007-08 crash.
“In about ten days or so, there’s a measure called the ULA measure that’s going to go into effect, which is going to be probably the hardest hit to the real estate market that we’ve seen since 2007,” broker and television personality Josh Altman said on “Varney & Co.” Monday.
Altman’s comments come in response to the recently-passed “United to House L.A.” (ULA) measure in California, which adopts a so-called “mansion tax” on property sales or transfers over a certain value to pay for affordable housing.
Properties sold above $5 million but below $10 million are subject to a 4% sales or transfer tax, while properties that sold for more than $10 million will face a 5.5% tax, according to the city clerk’s voter information pamphlet.
At least 92% of taxpayers’ money would “fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program,” the pamphlet also clarified.
California’s “United to House L.A.” measure will create “the hardest hit to the real estate market” since 2007, “Million Dollar Listing” star Josh Altman said on “Varney & Co.” Monday. (Getty Images)
“The way that this ULA measure was passed is just mind-boggling to me,” Altman added, “and I think it’s one of the most ridiculous bills that I have ever seen in my entire 20-year career.”
The Los Angeles city administrative officer estimated the proposed tax could generate $600 million to $1.1 billion in revenue each year. However, he noted it would “fluctuate” based on how many property transactions with values within the scope of the tax actually occur.
While those who support the measure argue it could help solve L.A.’s housing affordability and homeless crisis, others like Altman caution the tax policy would lead to higher home prices and bureaucracy.
Managing partner of 8VC Joe Lonsdale joined ‘Fox & Friends’ to discuss how the tax would affect America’s most wealthy and why the state is a ‘total mess.’
“Think about these people that bought houses three years ago for $5 million and they want to sell now,” Altman hypothesized. “The market’s down, rates are up, that happens. But now they got to cut a check for $200,000 out of their own pocket because there’s no profit on that. So it’s really going to rock the real estate market that we’re in here in Los Angeles.”
California’s real estate market, the “Million Dollar Listing” star further argued, is on “a race to the bottom” over the next 10 days as buyers try to close deals before the mansion tax is enacted.
Josh Altman of “Million Dollar Listing” warns California’s “mansion tax” will “trickle down” to working and middle-class households. (Getty Images)
“I’m seeing deals get done that should never have gotten done,” the L.A. agent said. “I’ve even done as much as, on a $28 million listing that I have, we have offered a $1,000,000 bonus for anybody who buys and closes before April 1.”
The “main issue” with the ULA measure remains its “trickle down” effect — not on mansion or luxury homeowners, but on working and middle-class California families.
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Josh Altman spoke to FOX Business about the luxury real estate market and the impact of the new “mansion tax” in Los Angeles.
“People who voted who said, ‘Oh, I don’t have a $5 million house,’ which by the way, is not a mansion in L.A., we’re talking about a four-bedroom, 4,000 square-foot house in L.A. is $5 million, so this isn’t a mansion tax,” Altman said.
“This isn’t a $30, $40, $50 million house tax – these are regular people that work bill to bill, that have to pay their mortgage just like everybody else, and now they’re being penalized here.”
FOX Business’ Aislinn Murphy contributed to this report.
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