Kauai Real Estate, Wire Fraud

Kauai Real Estate SOLD and NEW listings Island Wide! Add comments

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In Escrow Waikomo Stream Villa unit #232 listed at $535,000 (FS)!!! Click on picture to take a video tour and call me if you missed out on this one. Lynda Gill (RS) 808-346-0056

Kauai Real Estate Update 
For a complete list of what sold, went into escrow and the new listings island wide for last week click here: Kauai Real Estate Activity January 29 to February 4, 2018

In Escrow! I did not have my latest listing at the Waikomo Streams on for long and we got an accepted offer! This was the only 2 bedroom 2 bath unit that was on the market and it had a great location and had been well maintained. For all the information on Poipu Beach fee simple real estate news click here: Poipu Beach Real Estate Current Market Analysis

My Kiahuna Plantation page has been updated as well, click here to get up to speed on all things Kiahuna: Kiahuna Plantation Current Market Analysis

Kauai Year To Date Market Analysis
The January numbers are in for us to see where we are at compared to this same time last year.  The number of sales are down pretty much which is right in line with the increase in the Median Price, there are two exceptions:

  1.  Land on the North Shore Median Price is down but they only had 1 sale.

2.  Condominiums in Poipu Beach: The Median Price went down from $262,000 to $105,000 and the reason for that is the sales at the Kiahuna Plantation.  The Kiahuna is a leasehold property and the condominium prices are a fraction of fee simple condominiums so these lower prices will decrease the overall Median Price.  January 2017: out of the 14 condominiums that closed escrow 6 of them were Kiahuna Plantation units.  Out of the 6 units at the Kiahuna that closed last year one of them sold at $500,000 which helped to keep the Median price up.  Compare that to January 2018: we closed on 13 condominiums and 8 of them were Kiahuna Plantation units.  Two of those 8 units were priced at $105,000 and the other 6 were all $60,000 and under.  This threw our prices way off.

See the graph below and call me if you have any questions on how this relates to your particular area of interest.

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Call Before You Wire!
True story: A couple on the mainland were buying a home and the process had been relatively smooth, nothing unusual until they were told to wire their remaining funds.
Even the request from the Escrow Company for their $610,000 that was needed to close was not unusual looking, in fact it looked just like the wire instructions for their initial deposit, the email they received from the escrow company was even encrypted, just like the first one that they received. So they clicked on the links and followed the wiring instruction and sent their $610,000.

And the escrow company never received it.

Stories like this are happening all across the United States and I personally know of incidents like this that have happened here on Kauai and the other islands. Wire fraud is fast becoming the new scam. Last year the FBI reported that over $5.3 billion had been fraudulently wired to places it should not have gone and most times the people that have wired the money have little to no recourse. The money is just gone and the property they were going to buy does not get bought. Real Estate transactions are the crooks favorite target and here’s how it works:

It all begins with email.
Criminals will hack into a Realtors, Title/Escrow Company or Lenders email system and lurk on chains for weeks waiting for the right moment to pounce. When the situation presents itself, often when there’s a short deadline to finish a housing close, the hacker will send an email mimicking the exact format of your realtor, lender or title company.
The hackers switch the details of where to wire your money during a time-sensitive and already overwhelming process, which is why it’s easy for even the most diligent of people to become victims. Wired funds are not insured so the people are just out of the money and out of the property they were going to buy.

What can you do? There are a lot of Internet sites that tell you how to spot a fraudulent request but my thought on that is that these scammers are pretty good and as soon as we’re on to how to spot them they will figure out something new. I’ve heard a story about a couple that were buying a property here on Kauai and when they got the encrypted email requesting their funds they took the extra step to call the “escrow officer” that was on the email to verify that the email was legitimate. Problem was: the scammer was answering the phone and assured the person that the email was legitimate! Funds were wired and the funds are now gone-forever.

It is important to discuss with your Realtor how to handle wire transfers. I came up with a plan of action after consulting with a title company over here: I have my clients NOT do a wire transfer when requested but instead call me when they receive the request. I know exactly who the escrow officer is that we’ve been working with and will give my clients their contact information (or I patch them into the call) so my clients can verify the email.  Some scammers will keep the same escrow officers name but will tweak the spelling just a tiny tiny bit, you don’t even notice.  So when you call it’s the person that sent the fraudulent email!  This extra step will insure that won’t happen and the escrow companies welcome the extra caution.

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