By: David Simpson, Chief Growth Officer, and Nathan Wosnack, Founder & CEO @ UBITQUITY, LLC
In the complex landscape of real estate, scams are proliferating, posing a significant threat to both industry professionals and unsuspecting buyers. The housing market’s ongoing inventory shortage has created a fertile ground for fraudulent activities. In 2022 alone, the FBI registered a staggering 86% increase in real estate/rental scam-related complaints, totaling over $396 million in losses.
Our attention was drawn to this critical issue when Yahoo Finance Housing Reporter Dani Romero discussed the rising trend of real estate scams on a recent live show. Scammers are employing increasingly sophisticated tactics, utilizing minimal paperwork and online tricks to exploit vulnerabilities in the real estate sector. As technology advances, transactions conducted through phone and email have become more prevalent, making it easier for scammers to operate from a distance.
One alarming trend is the rise of scams targeting vacant land, where scammers impersonate sellers, manipulate public records, and using fake IDs to give a façade of legitimacy. A notable case occurred in Minnesota, where a real estate agent fell victim to a scam involving a seller claiming to be out of state, orchestrating an entire deal without any face-to-face interaction.
The Secret Service’s New York field office reported a surge in calls related to this type of scam, emphasizing the urgency for industry-wide solutions. In response, UBITQUITY, LLC proposes our flagship product: NFTitle.
The simplicity of NFTitle lies in our ability to put property titles on multiple blockchains, securely stored with IPFS and backed up Google Cloud Platform (GCP) with full disaster recovery, providing an immutable and transparent record of ownership. This technology is poised to revolutionize real estate transactions by offering buyers a foolproof method of verifying ownership. Just as buyers currently seek a carfax for used cars, the demand for our interconnected NFTitle Network is projected to become a standard practice in the future.
How Real Estate Scams Operate: A Closer Look
- Rise in Vacant Land Scams: Scammers are increasingly targeting vacant land transactions, capitalizing on the lack of physical presence and stringent documentation.
- Seller Impersonation: A new and sophisticated form of crime involves scammers impersonating legitimate sellers, using fake IDs, and manipulating public records to establish false ownership.
- Minimal Paperwork: Scammers are getting away with minimal paperwork, exploiting the ease of online transactions and the reliance on technology.
- Tech-Facilitated Transactions: The use of technology enables scammers to conduct transactions remotely via phone and email, making it difficult to verify the authenticity of the parties involved.
- Fake IDs and Remote Notary Services: Scammers employ fake IDs and utilize remote notary services to create a façade of legitimacy.
Industry Insights and Solutions
According to a Real Estate Professional Survey by CERTIFID, 77% of real estate professionals reported an increase in seller impersonation attempts within the last 6 months. With 54% experiencing at least one such attempt, it is evident that the market’s low inventory has made real estate professionals prime targets for scammers.
Home Sale Red Flags:
- Client wants to list property significantly below market value
- Strong preference for cash transactions
- No for sale sign in the yard
- Emphasis on urgency to sell quickly
- Lack of in-person or video communication
- Claims to be out of state or country
- Utilizes remote notary services and requests remote closing
To mitigate the risks associated with real estate scams, the National Association of REALTORS® (NAR) recommends filing a claim with title insurance and promptly filing a police report.
As leaders in the web3 industry, the team at UBITQUITY, LLC understands the urgency of addressing the escalating concerns surrounding real estate scams. Our commitment to combating fraud is epitomized by our innovative NFTitle Network, — a revolutionary solution that has already recorded, minted, and stored over a million real estate documents since its launch in March 2023, not only helps prevent scams but transforms the real estate landscape through the strategic integration of blockchain technology, NFTs, and secure peer-to-peer document storage in collaboration with title/escrow companies, real estate agencies, property management companies, and insurance underwriters.
Unlocking the Benefits of NFTitle:
- Enhanced Security: NFTitle leverages the robust security features of blockchain technology, and NFTs via its own fully opt-in marketplace called Emporium, ensuring that real estate transactions are conducted with an unparalleled level of security and transparency.
- Immutable Record Keeping: Through the power of NFTs, NFTitle establishes an immutable and tamper-proof record of ownership. This not only bolsters the authenticity of property ownership but also acts as a powerful deterrent against fraudulent activities.
- Encrypted Peer-to-Peer Storage: NFTitle employs encrypted peer-to-peer storage for documents, providing an additional layer of security. This collaborative approach with key industry players — title/escrow companies, real estate agencies, and insurance underwriters — ensures that sensitive information remains confidential and protected.
- Streamlined Collaboration: NFTitle facilitates seamless collaboration among stakeholders in the real estate ecosystem. By connecting title/escrow companies, real estate agencies, and insurance underwriters, the software promotes efficient and secure communication throughout the entire transaction process.
- Building a Trustworthy Future: In navigating the dynamic landscape of the housing market, NFTitle empowers us to collectively construct a future where scams no longer jeopardize the stability and trustworthiness of our industry. Each block added by NFTitle is a testament to our dedication to eradicating fraud — one secure transaction at a time.
At UBITQUITY, LLC, we invite you to join us in ushering in this new era of secure and transparent real estate transactions. Let’s collaboratively build a future where the integrity of the industry is upheld, safeguarding the interests of all stakeholders. Together, we can create a robust and trustworthy real estate ecosystem — One Block At A Time®.
