While tenant screening background checks are a prudent and increasingly widespread practice, some recent events are making the need for screening in other aspects of property investment apparent. Court cases in both Illinois and Las Vegas, NV reveal that real estate professionals are not always who they claim to be in terms of reputation and trustworthiness.
Trusting Your Real Estate Professional
Unfortunately, wherever money is involved, fraud is possible. The real estate realm can be particularly risky due to the sharing of sensitive information such as personal details, social security numbers and financial information. While property investors are somewhat protected due to the licensing and standards required of realtors, it is still possible for an unscrupulous real estate professional to receive a license.
As the real estate market recovers, the risk of potential fraud committed by realtors also rises. While realtors are often trusted implicitly by those who sign on with them, sometimes trust that is given too freely can lead to disastrous financial and personal consequences.
A suit for dishonesty related to real estate was prosecuted recently in Las Vegas, where an Arizona agent was found guilty of fraud and conspiracy due to a mortgage lending scheme. The scheme defrauded lenders of over $24 million in the years leading up to 2007, when the bottom fell out of the housing market.
Negligence, Lack of Real Estate Professional Expertise Leads to Losses
Another lawsuit in the real estate realm was filed in Madison County, Illinois this past June 2015. An area couple is suing a brokerage firm there due to realtor negligence, which resulted in an improper property transaction in 2009. The documents drafted by the real estate firm were allegedly too vague and not properly supported or advised by an attorney. The couple was also not fully informed of their responsibilities and rights, their suit claims.
Taking Steps to Protect Assets
About half of all U.S. states do conduct background checks on realtors and other real estate professionals, but this means that half do not. Some states that do check backgrounds may not look very thoroughly into the backgrounds of real estate professional agents.
A criminal background search is simple with the use of a professional background screening service. Doing a criminal background search and a financial background check could mean the difference between connecting with a verified, reputable real estate professional, or potentially being defrauded by one with a criminal past.