Online Money Scams Target Home Buyers: Ways a Real Estate Attorney Can Help   

 Posted on December 01, 2022 in Mortgage

Purchasing a home is probably the biggest investment you will make in your life, and when you find your dream home you are probably going to be excited about locking it in with a big down payment. But online scam artists are ready to take your hard-earned money. Wire fraud is now the fastest-growing scam in the United States, up more than 1,000 percent between 2015 and 2017. If you are buying a home a skilled real estate attorney can guide you through the process and help you avoid any pitfalls.

The Scam: Fake Wiring Instructions

The FBI reports there are phishing scams to divert your down payment and closing costs into a fraudulent account. Typically, it comes across as last-minute changes to your wiring instructions. The scams are astronomically successful and translate into nearly $1 billion in real estate transaction losses.

Closing Funds

The lender will give the buyer the closing disclosure three days before closing. It contains an estimate of the amount necessary to close. The actual amount is usually obtained by the real estate closing attorney who informs the buyer.

Most of the time, a buyer needs to pay closing costs. The money should be at the title company at the time of the closing. The Good Funds Law in Illinois lays out in what form the funds should be to close the transaction in the following ways:

• If the funds needed to close are more than $50,000, then those funds need to be wired 

• If the funds are under $50,000, then a cashier’s or certified check is necessary

Whether you are wiring the money or have a cashier’s check, the funds must be available in your bank account. Some financial institutions use an ACH transfer, which can take longer than a wire. It is important that you make sure the funds are accessible so you do not default on the contract from the get-go. 

Attorney Required in Illinois

Numerous unforeseen issues can arise during the home-buying process and to that end, the state of Illinois requires a homebuyer to have an attorney who will review the purchase agreement before a home purchase is final. Keep in mind that when thousands of dollars are at stake, the purchasing contract needs to have a contingency clause that states that a purchase contract is subject to review and modification by an attorney. Here are additional legal tasks your real estate attorney can perform:

• Negotiating any repairs

• Defining possession and timing issues

• Discussing your financing options

• Checking for title defects

• Discussing closing figures and tax prorations

• Reviewing the loan documents

• Be present at closing to ensure all is in compliance

• Recording the deed and final title insurance policy once the closing has taken place

Contact a Round Lake, IL Real Estate Lawyer

Avoid scams and other expensive mistakes when you buy a home. Contact Newland & Newland, LLP to work with an experienced Libertyville real estate lawyer who will provide legal guidance to make sure your rights and investment are protected. Call 847-549-0000 for a free consultation.

Sources:

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=021501550K26

https://www.nar.realtor/financing-credit/crimes/protect-your-money-from-mortgage-closing-scams-when-buying-a-home 

https://www.chicagotribune.com/real-estate/ct-re-wire-transfer-fraud-20210813-35nvi4bfwbcu5d2xx7t3zjzzza-story.html