Real Estate Fraud: Protect Yourself

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News Flash

Deed Fraud and Email Scams: FBI Sounds the Alarm

Real estate fraud is hitting new heights, and the FBI wants you to know about it. Two schemes in particular are causing major headaches: quit claim deed fraud and business email compromise (BEC) scams.

What's quit claim deed fraud? It's when criminals forge documents to make it appear they are the true owners. Imagine buying a property only to find out the sellers didn’t actually own it. These fraudsters are getting increasingly bold with their fraud tactics.

Meanwhile, BEC scams continue to plague transactions. These aren't your garden-variety phishing attempts. Cybercriminals hack into email accounts (often the result of phishing scams), monitor conversations between parties, then swoop in at the perfect moment with fake wiring instructions.

The damage is staggering. In 2023 alone, the FBI received over 21,000 BEC complaints with losses exceeding $2.9 billion. And yes, real estate transactions remain prime targets because—let's face it—where else are people regularly wiring six and seven-figure sums?

Bottom line: Your transaction security protocols need to be airtight. Double-verify those wiring instructions through phone calls (not email), or more ideally work with an escrow agent who uses specialized software to validate wire instructions, and keep a suspicious eye out for any suspicious deeds.

Office Space: The Grand Reduction

For the first time since at least 2018, more office space is vanishing than appearing in the U.S. market—a truly historic shift in commercial real estate.

CBRE projections show approximately 23.3 million square feet of office space will disappear by year-end. Demolitions and conversions are outpacing new construction, which will add a mere 12.7 million square feet to the market.

What's happening to all those empty cubicles and conference rooms? They're becoming apartments and condos. A whopping 76% of active office conversion projects are transforming into residential spaces.

The remote work revolution isn't just changing how we do business—it's literally reshaping our skylines and neighborhoods. This office-to-residential pipeline might just be the unexpected solution to housing shortages in many urban cores.

Are we witnessing the death of the traditional office, or just its extreme makeover? Either way, commercial real estate's landscape is undergoing its most dramatic transformation in decades.

Sources: [Source], [Source], [Source]

More You Should Know

• Inventory Surge Continues: National housing inventory is up 20.8% year-over-year, widening the buyer-seller gap and with specific markets like Miami-Dade and Denver experiencing significant surges. [Source]

• AI Dominates Real Estate Tech: More than half of real estate technology products now integrate artificial intelligence for functions such as content generation, lead routing, and business intelligence, marking a significant increase and reshaping how real estate professionals operate. [Source]

• Mortgage Rates See Slight Dip: Average 30-year fixed mortgage rates experienced a modest decline to 6.94% in early June, despite continued low purchase and refinancing application activity compared to previous years. [Source]

• First American CEO Departs: Following an incident on a cruise ship that resulted in his arrest, Kenneth DeGiorgio has been fired as CEO of First American Financial. [Source]

• Young Adults Priced Out: The escalating housing affordability crisis is severely impacting young adults in the U.S., as median home prices significantly outpace average salaries, making homeownership increasingly unattainable. [Source]

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