Buyers and sellers in real estate transactions often have minimal direct interaction. Arranging for a showing when the seller isn’t home prevents them from micromanaging the inspection process and also reduces the likelihood of discrimination occurring when the seller evaluates offers.
The lack of in-person contact can make closings more efficient and less prone to bias, but they open the door to another potential risk. Buyers can potentially end up embroiled in fraudulent real estate transactions involving a buyer who is not who they claim to be.
Technology facilitates fraud
Title companies, mortgage brokers and other parties who assist with real estate transactions are increasingly reliant on technology. In some cases, the technology they use may actually put property owners and buyers at risk of fraud.
Allowing a seller to communicate solely by email, telephone and possibly video conference creates an opportunity for someone to completely misrepresent their identity. They can use images they find online to create deepfake videos or utilize a fabricated AI persona to impersonate the owner of a property in which they personally hold no legal interest.
This situation can leave buyers and possibly lenders out hundreds of thousands of dollars and without any true ownership interest in the property they attempted to purchase. To avoid deepfakes and AI fraud, buyers may need to use public records to locate the seller and validate that the property is for sale. They may also need to partner with a real estate attorney who can assist them with the due diligence process.
Understanding how technology contributes to real estate fraud can help potential home buyers take appropriate steps to protect themselves. With effective legal support, buyers can limit their likelihood of falling victim to fraud and can streamline the title search process as well.