Real estate agents are likely aware of the broad scope of risks they face. Recent schemes have become more prevalent within the industry. The 2008 housing market collapse was a clear red flag for potential clients and firms alike. This indicator showed America that real estate agents are vulnerable to a variety of accusations including identity theft, loan sharking and more. These professionals need to be equipped with the right Real Estate Crime Insurance policy.
Due to this recent calamity, federal investigators have been even more proactive in identifying and stopping schemes in the real estate sector. This is called quality control and it has shown to be a great way to mitigate any concerns of a possible looming crisis. Real estate agents are now held to a higher standard.
Below are some practices that are apparent in the real estate sector. Hopefully this will help resolve any misgivings you may have of the current market.
Home Flipping- While being legal, it’s important for investors who purchase these homes and then remodel them, to provide lenders with the proper financial statements. Agents who sell these properties must be diligent and ensure proper documentation as well.
Settlement Disagreements- According to the Internal Revenue Service, this occurs when one settlement statement is prepared and provided to the seller accurately reflecting the true selling price of the property. Following this a second fraudulent statement is then given to the lender showing a highly inflated price. Real estate agents must be cautious about potentially inflated estimates to reduce the risk of fraud.
Qualifications Fraud- This occurs when a real estate agent misrepresents the clients’ financial and credit history in order to make them more appealing to lenders. This is a serious offense and can land the real estate agent a hefty lawsuit and penalties.
At Genesee General, we specialize in insuring the real estate sector. For 34 years, we have continued to provide quality and affordable solutions for clients like yours. For more information, contact us today at (800) 282-8755.