That’s what it feels like, thanks to Windermere’s relationship with Demco Law Firm. Most real estate transactions go smoothly, but when issues arise, consequences can be dire and Demco is always amazingly quick to respond.
Earlier this week Lars Neste from Demco stopped by our office to talk about legal hot topics affecting real estate buyers and sellers. At the top of his list was wire fraud. Example: A crook hacks into an escrow company’s email system. He contacts buyers for a soon-to-be-completed transaction and tells them there’s been a change in wiring instructions. The buyers send $275K to a fraudulent Wells Fargo account. The following day, they hear from the real escrow people and panic ensues. The unsympathetic seller threatens to call off the deal.
In this case, Demco was able to help all parties obtain a reasonable resolution. The escrow company stepped in to provide interim funds and much of the stolen money was ultimately recovered. But the takeaway was, NEVER wire funds to ANYONE based only on email instructions. Call the real recipient to verify the account info. Also, be very suspicious of changes in wiring instructions.
Lars also brought up risks associated with direct email communication. Example: A seller emails the buyer’s agent directly, promising offhand to pay for certain repairs. He later regrets his generous offer and wants to renegotiate. Lars thought the buyer might have legal grounds for saying no, because what, really, is the difference between expressing consent via email versus putting your electronic signature on a document? The two actions very clearly show the same intent.
However, if it was the seller’s Realtor who told the other party that the seller might be willing to consider whatever repairs, the seller would NOT have been on the hook. The moral of the story was, buyers and sellers should be very cautious of direct communication with the other party or their agents, lest they incur legal obligations without careful consideration.
We also discussed the fine points of customizing escalation clauses and debated the value of offering low appraisal coverage when a buyer has already waived his financing contingency, but those stories will have to wait until another time.