Avoiding Real Estate Scams
By Tim Ford, Real Estate Broker
There is no shortage of scams out there these days. The scammers have discovered Real Estate and unfortunately, they’ve had some success. There are two main Real Estate scams the public should be aware of to protect themselves.
The first big Real Estate scam is wire fraud. Incidents of wire fraud have been increasing and have occurred in Bozeman. According to the FBI’s Internet Crime Report from 2021, on a national level over $6.9 billion in victim losses occurred in 2021.
Here’s how the scam works: Criminals hack into the email accounts of Real Estate agents, title companies, and lenders. Based on the email activity, they will see a new pending transaction or a closing coming up. They will then email the buyer, pretending in the email to be the either the Real Estate agent, lender, or title person, and give the buyer wiring instructions for the buyer to send in either their earnest money or potentially their downpayment.
The unsuspecting buyer, knowing their closing is coming up, schedules the wire of their downpayment or earnest money, but instead of sending it to the title company, they wire the funds to the criminals. If the funds can’t be recovered, the buyer often loses those funds. Multiple cases of this scam have happened in Bozeman, with some unfortunate buyers losing out on tens of thousands of dollars they were hoping to use for the downpayment on their new home.
To avoid this scam, the first choice would be to use a cashier’s check to bring downpayment funds to closing. If this is not possible, any wire instructions should be independently verified over the phone through a trusted source. Also, any unexpected emails regarding wire instructions, or any emails purporting a change in wire instructions should be viewed with extreme suspicion and verified over the phone through a trusted source.
Another scam that has taken place in Montana involves vacant land. Criminals will pose as the owner of a vacant piece of property, generally one that does not have a mortgage or debt owed on it. The criminal will contact a Real Estate agent over the phone stating they want to list and sell their property. They will generally price the property for a quick sale, preferring a cash offer, and will quickly accept an offer, often below market value. The criminals will use remote notary signings and will provide forged documents to the Real Estate agents and title companies. The title company then unknowingly sends the proceeds of the sale to the criminal.
This scam really requires more vigilance from title companies and real estate companies in verifying they’re dealing with the actual property owner. However, it could be a good idea for owners of vacant land to keep an eye on listings in the area of their property. They could even potentially contact a local real estate agent that could set them up on an auto-notification to receive emails alerts when properties with similar characteristics such as lot size, area, etc, hit the market. This is even more important if the vacant land is free of mortgages or other liens.
As usual, I have included home sale data. In addition to the 79 homes sold during the first 2 months of this year, another 86 homes are currently pending, or under contract, as of the date of writing this article. This compares to 87 pending sales at this same time last year.
The included data reflects sales of single family homes in the greater Bozeman area, including Four Corners, Gallatin Gateway, Bridger Canyon, and Bozeman city limits. The data includes home sales reported through the local Big Sky Country MLS, and does not include private party sales, Condominiums, or Townhouses.
2023 Real Estate Market Data
Data for Single Family Home Sales
Data for trailing 6 months, Sept 1st through March 1st
|Total Sales – Bozeman||420||509||440||312|
|Median Sales Price||$500,000||$639,700||$815,000||$897,000|
|Average Sales Price||$628,578||$833,255||$1,162,060||$1,158,605|
|Average Days on Market||64||49||27||54|
|Median Days on Market||29||8||11||35|
Total Sales – Bozeman
January 1st through March 1st
|Year||# Homes Sold|