Byte of Prevention Blog

by Jay Reeves |

SIMPLE Wire Fraud Advice From Investors Title

The best advice for avoiding wire fraud in a real estate transaction is SIMPLE. 

Seller Identity Must Precede Literally Everything.

That’s the headline of a new risk management brochure from Investors Title Insurance Company.

“When we are small children, we are warned about talking to strangers,” says the brochure. “As adults, we become less suspicious of strangers but still acknowledge the risks of unknown individuals. For example, before giving anyone money, we want to know who they are. Before proceeding with any real estate transaction – the same rules apply. It is SIMPLE. Know the client. Know the customer. Identify the seller.”

Download the Investors Title SIMPLE brochure here.

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SIMPLE Advice From Investors Title

Four Essential Steps

  1. Verify Seller Identity
  2. Verify or Select Notary
  3. Control Disbursement
  4. Investigate Property

Tips for Verifying Seller Identity

  • Responsibility for verifying seller identity is on everyone - real estate broker, attorney preparing the deed, and attorney handling the closing.
  • Contact seller directly at an independently discovered and validated phone number.
  • Use internet search or reverse phone lookup to locate and identify seller or location of phone number.
  • Ask seller for a copy of their government issued identification and review for signs of tampering.
  • Use an identity verification platform, such as CertifID, to validate seller credentials.
  • Check where tax bill is sent and compare to seller contact information.
  • Mail owner at physical address.
  • Ask a neighbor how to contact property owner.
  • Upon receipt of documents, compare seller signature to seller signature in previously recorded documents (whether in the chain of title or, if an entity or trust, with the Secretary of State or on trust documents).
  • Ask seller to meet in a virtual video platform such as Zoom to share identification.
  • If real estate broker is involved, ask how they know the seller.
  • If property is leased: Ask tenant for landlord (property owner) contact information. Ask property owner or tenant for a copy of the lease. Ask about the assignment of the lease. Ask where rent payments are sent. Ask about the transfer of the security deposit.
  • If an entity: Compare address of the officer(s) and/or registered agent to seller contact information If registered agent is seller attorney, contact them to verify seller legitimacy and authority. If property is owned by a trust, request a copy of the trust document and contact the beneficiary(ies).


SOURCE: Investors Title Insurance Company

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About the Author

Jay Reeves

Jay Reeves practiced law in North Carolina and South Carolina. He was Legal Editor at Lawyers Weekly and Risk Manager at Lawyers Mutual. He is the author of The Most Powerful Attorney in the World, a collection of short stories from a law life well-lived, which as the seasons pass becomes less about law and liability and more about loss, love, longing, laughter and life's lasting luminescence.

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