The global pandemic has changed many industries, processes and ways of doing business. However, if there is one shift that was well underway prior to the pandemic, it’s the transition to an online world.
The ongoing digital revolution has drastically altered the way we live and changed consumer expectations across all industries, and real estate is no exception.
As digital transformation continues, however, so too does the amount of information available in the cloud, providing more opportunities for fraudsters looking to access vulnerable data.
With this in mind, digital transformation can be a contributing factor to the problem of digital fraud, but also a critical resource for solving it.
Moving away from traditional processes
The global pandemic has expedited the adoption and integration of various technologies, replacing previously offline or in-person activities with digital options.
Today, digital experiences like virtual appraisals, remote closings, e-signatures and cloud-based document sharing have become must-haves for consumers, not just nice-to-haves.
Across all steps of the real estate transaction, a critical example of this transformation is identity verification. Previously, the traditional, in-person model for validating identity relied on one person reviewing a driver’s license to ensure it matched the person in front of them.
This is a process that has been used for decades, but it is one with potential to leave room for human error if fraudulent information is being provided.
There is no doubt that fraudsters are becoming more sophisticated and, as careful as an individual may be when checking the identification, it can be difficult to flag fraud based on simply an in-person manual review.
Fast-forward to today.
Given the ongoing importance of identity verification in a real estate transaction, the model had to be adapted to ensure identification could still be verified, while taking into account social distancing measures and limited in-person meetings.
With new digital ID verification solutions in place, lawyers were presented with an opportunity to decrease the risk of incorrect identification and verification.
Identifying new types of online fraud
Despite the reduction in potential human error, the shift to digital does not negate all risks.
Fewer in-person meetings are resulting in clients becoming more reliant on email communication and more sensitive information being stored in cloud-based databases, ultimately leaving them vulnerable to email or money transfer scams.
Wire fraud in the funding process, for example, has become more prevalent. It can occur when fraudsters intercept an email chain and instruct a law firm to send funds to a different, fraudulent account.
Prioritizing communication to eliminate risks
During National Cybersecurity Awareness Month, customers and businesses are encouraged to ask questions to ensure they understand all of the new online processes they’re exposed to.
Lending and real estate professionals should schedule regular phone or video calls to walk through each step of the process and should encourage clients to call if they are unsure of anything along the way.
This will prevent important personal information being sent over email, which could make clients more vulnerable to fraud attempts.
Navigating the new digitized world
At FCT, we are dedicated to improving digital processes for real estate professionals, delivering a more intelligent and connected journey. However, we recognize we must be cautious in our approach.
COVID-19 has created new opportunities for how identities may be verified, but with that comes additional avenues for fraud – and fraudsters are only getting more sophisticated as they adapt to the COVID-19 environment.
Luckily, this isn’t a new trend; technology will continue to evolve to be able to better detect, deter and prevent fraudulent real estate transactions.
In such a highly regulated industry, we believe a mature and informed approach to technology is always best.
Organizations across all sectors need to remain proactive and open to new technologies, ideas and partnerships that can help Canadians continue to navigate the new normal and protect themselves and each other from potential cyber threats.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
