Avoid money wiring scams

bait2
Don’t take the bait

On March 18 the FTC Consumer Blog issued a post focused on hackers who have been breaking into some consumers’ and real estate professionals’ email accounts to get information about upcoming real estate transactions. After figuring out the closing dates, the hacker sends an email to the buyer, posing as the real estate professional or title company. The bogus email says there has been a last-minute change to the wiring instructions and tells the buyer to wire closing costs to a different account. But it’s the scammer’s account. If the buyer takes the bait, their bank account could be cleared out in a matter of minutes. Often, that’s money the buyer will never see again.

If you are buying a home in Minnesota assume that requests to wire money are bogus if they are coming from real estate agents. Be very suspicious of wiring requests from anyone asking for closing costs. Real estate agents and real estate companies do not ask for money wires.

We do have a system called “TrustFunds” for electronic earnest money payment.  A link is sent to the buyer with a request for earnest money. It isn’t the same as wiring money and it is easy to verify that the request came from your buyer’s agent. That money goes into a real estate trust account where it is held until the closing or cancellation of the purchase agreement.

As a listing agent, I have gotten all sorts of weird emails from people who want access to my bank accounts so they can send me money to pay for homes I have listed . . ya . . . right. Real estate agents and companies are targeted for various scams.

Avoid emailing any kind of financial information.

Housing counseling for seniors

As of October 1, 2011, all Minnesotans interested in entering a registered housing with services setting, such as assisted living, must be offered a long-term care consultation before signing a lease.

The consultation is free through the Senior linkage line. I have had their logo and a link on the right sidebar of this site for several years. The Senior Linkage line and the Minnesota Board on Aging are some of the best senior resources that most have never heard of.

They also have a program where they help seniors who are in nursing homes move back into the community. The initiative expanded in 2018 because most seniors do not want to live in nursing homes. It would be hard to find someone who wants to be in a nursing home.

Moving into assisted living isn’t for everyone and it is very expensive. There are other options for those who need help at home, like in-home care. I have read a few articles that suggest middle-income seniors will not be able to afford any kind of assisted living in 2029 an beyond.

Last year I had a problem regarding my mother’s medical assistance that I was unable to resolve without help. I called the senior linkage line and they got on the phone with me as I talked to a third party.

They along with me advocated for my mother and the problem was quickly resolved. They knew what to say, how to say it and who to say it to.

 

Local Vs. National numbers

Home sales were down in June of 2019 from June 2018 nationwide but by how much varies by location. In the Metro area, year over year home sales were down by 2% and were down by 4.5% in St. Paul. Nationally home sales were down 2.2% in June of 2019 from June 2018.

Locally the inventory of homes on the market has been pretty steady at about a two month supply while nationally there is a 4.4% supply. The numbers may seem small but when I work with home buyers I can actually feel the difference between a 2 month supply of houses and a 4 month supply. In a balanced housing market, there is a six month supply of housing.  We remain in a strong seller’s market.

If you are planning to buy or sell real estate this year the local numbers are the ones to watch.

There are still more home buyers than home sellers. I think the trend will gradually ease up over the next decade or so as older generations reach their peak home selling years. Some experts are predicting a great real estate sell-off as baby boomers age. I think a gradual sell-off is more likely considering the 19 years age range of baby boomers.

Here is an infographic with the national existing home sale data for June 2019.

June Existing home sales infographic

August 1st isn’t the best day to buy a house

Each year changes are made to the forms we use for real estate contracts. Some years the changes are huge and other years they are small. The new forms are not available until August 1st which is the same day they go into effect.

There isn’t any law against using last years forms but new laws go into effect on August first, 2019 that may not be reflected in the new contracts. Most of the changes are to make the contracts more user-friendly for all parties. Some changes reflect changes in business practises and technology.

We do get a summary of changes to the contract forms in both written and video form ahead of time and that does help because we know what to expect.

People do buy houses on August 1st. It just might take a little longer to fill out the contracts and triple check them for mistakes.

I think the reason we do not get to see the contracts ahead of time is there is a concern that we will use them ahead of time. A workaround might be to send out contracts with large “sample” watermarks on them.

The standard purchase agreement for residential real estate is 12 pages long. That excludes the one-page wire fraud advisory added last year and the two-page arbitration disclosure that is added to most purchase agreements or the 12-page seller’s disclosure and the two-page lead-based paint disclosure.

One of the most important changes last year was changing the contracts so that agents don’t have to number the pages.

The 2019 contracts have added language to make the inspection process more understandable. The amount of time allotted for a home inspection includes the inspection AND all negotiations because of the inspection need to be completed during that same period.

Language has been added to contract cancellation form so that earnest money can be returned by check or electronically.

There is more. The best way to see the contracts is to buy or sell a house. We are not allowed to share blank contracts with consumers.

In general, the forms are far more user-friendly than they were when I first got my license back in 2002. Back then the contracts were in legal-sized paper with carbon. Today contracts can easily be created and signed electronically and can be printed if needed on standard letter-sized paper.

The amount of space it takes to run a real estate company has been greatly reduced because of electronic files.

Ramsey county 4R program

Reuse, Recycle and Renovate for Reinvestment Program – is what the Ramsey County 4R program is all about. I am very much in favor of saving old houses when possible and always in favor of keeping house parts and everything else out of landfills.

The program has been around since 2010 and is aimed at the tax forfeiture properties that the county becomes responsible for. Examples of the work that has already been done can be found on the Ramsey county web site.

Its mission is two-fold:

  1. Promote productive reuse of old building materials from deconstructed buildings in order to keep those materials out of landfills, thereby minimizing the effect on our natural resources and environment.
  2. Renovate dilapidated structures back to being appealing, taxable properties with an emphasis on using sustainable building practices and incorporating sustainable components in each renovation project.

The house in the picture has sat vacant for many years and is in the process of being renovated through the program. Eventually, it will be sold by public auction.  Revenue coming from the sale of tax-forfeited properties is used to replenish the fund for costs incurred and to use for future forfeited properties.

old house
735 Margaret Street – St. Paul, MN

 

Our economy is doing well but. . .

If our economy is doing so well how come I see people living on the streets? I have heard all kinds of reasons.

I did a little research and the number one cause of homelessness is the lack of affordable housing. It is possible to have a couple of jobs and not be able to afford a small apartment. Losing a job or having hours cut can lead to homelessness.

Chemical dependency and mental illness can cause people to lose housing.

More people without homes are staying out of formal shelters.  People experiencing homelessness is up 10% from 2015. It should be going down but is higher in Minnesota than it was during the great recession. Nearly a third of homeless adults have jobs. According to the latest research from the Wilder Research 

 

homeless in St.. Paul
Homeless camp
  • The number of people not in a formal shelter increased by 62% between 2015 and 2018.