Tandy On Real Estate

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Finally, More Millennials Are Buying Homes

According to Housingwire Millennials are finally buying homes. Ben Lane reported, “Back in September, after existing home sales fell to a three-year low, it appeared that many younger would-be buyers were turning to renting instead of buying. But things look much different just a few months later.”

The increase is being driven by younger buyers under the age of 44, and yes, that includes the older portion of Millennials. Homeownership among buyers age 35 and under rose from 36% to 36.5% in the last year, while homeownership for those from age 35-44 rose from 58.9% to 61.1% in the same time frame. According to CoreLogic’s Ralph McLaughlin, young households, which represent the largest pool of potential homebuyers in the United States, are starting to enter the homeownership game.

Millennials may have been slow to start, but that seems to be changing. Historically, Millennials have been reported to:

  • Have delayed marriage having kids, but that is finally happening.
  • Wanted to enjoy more experiences than traditional activities of buying a home – but that’s changing.
  • Been happy/content living at home, but they are finally getting tired of that or getting kicked out.
  • Have had student debt challenges, but are finally making enough to be able to handle a home debt. 

By the end of 2018, Millennials represented 45% of all new mortgages, compared to 36% for Generation X, and 17% for Baby Boomers, Realtor.com reported to Housingwire. Millennials have now surpassed older generations in the total dollar amount of mortgages, and represent the largest dollar volume by age group. Javier Vivas of Realtor.com says Millennials are getting older, and have better jobs and deeper pockets, allowing them to get into home ownership. They are, however, focused on home affordability, and shocker, are not always picking the large metros as many may think. Instead, they are looking for strong job markets and lower cost options in more non-traditional areas, i.e. Buffalo, NY. In addition, Millennials consistently made lower down payments than other generations since 2015, which is not surprising as a first-time homebuyer.

More Positive News

In Q1 2019, the U.S. Census Bureau reports a flattening in homeownership at 64.2% year over year, breaking an eight quarter streak of gains. CoreLogic attributes this flattening to an uptick in renters, although owner household growth continues to outpace renters. Ralph McLaughlin of CoreLogic brings us a very positive trend change to watch in his April 25th article:

  • The first quarter of 2019 was the sixth consecutive quarter that owner-occupied households grew by more than a million, at nearly 1.1 million new owner households.  
  • The number of new renter households jumped by close to half a million. This is a significant change in trend, as renter households previously fell six out of seven quarters.
  • Total household growth remains remain strong, topping 1 percent for six straight quarters, and continues the most significant streak of household growth in more than 12 years.

McLaughlin reports that data shows increasing evidence that not only are young homebuyers indeed pursuing the American dream of homeownership, but solid household growth overall should continue to support healthy demand over the next two decades. An estimated 46 million new households under the age of 30 will push up demand for both owner and renter-occupied homes over the next two decades. Despite recent headwinds and signs of a market cooldown, these demographic fundamentals should lead to a healthy housing demand through at least 2040.

This is great news for the housing market.

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SOURCES:

Housingwire – https://www.housingwire.com/articles/48317-homeownership-rate-rises-to-four-year-high-as-millennials-are-finally-buying-homes 

CoreLogic – https://www.corelogic.com/blog/2019/04/homeownership-rate-flat-but-household-growth-booming.aspx

Pew Research – https://www.pewresearch.org/fact-tank/2017/05/05/its-becoming-more-common-for-young-adults-to-live-at-home-and-for-longer-stretches/

Housingwire – https://www.housingwire.com/articles/48259-millennials-have-officially-entered-the-housing-market

Realtor.com – https://www.realtor.com/homemade/fact-or-fiction-millennials-are-the-rent-generation/

U.S. Census – https://www.census.gov/housing/hvs/index.html

Spring Buying Season Is Here

Spring is here. Finally, after a long, cloudy and wet winter we have had a couple sunny days, the bluebonnets are starting to boom, allergies are on high alert, and the Spring buying season is starting. To help you prepare, here is a snapshot of the housing market forecast.

Freddie Mac recently reported, “Mortgage interest rates have been steadily declining since the start of 2019. These lower mortgage interest rates combined with a strong labor market should attract prospective homebuyers this spring and could help the housing sector regain its momentum later in the year.” This is great news as we approach our typical Homebuying Season.

Mortgage interest rates continue to decline

According to Primary Mortgage Market Weekly Survey mortgage rates have steadily declined after reaching a high of 4.94 percent in November of 2018. As of late-March, the 30-year fixed mortgage rate was 4.28 percent, its lowest level since February 2018.

Home sales to slowly regain momentum

Existing home sales nationally fell by 7 percent, to 5.32 million homes, in November compared with November 2017, according to the National Assoc­iation of Realtors. Lawrence Yun, chief economist for the National Association of Realtors, expects sales to be flat in 2019. This spring will be the best measure of whether the housing market is returning from very tight to normal, Yun says.

Freddie Mac reports, “existing home sales slumped to start the year, likely in part due to exceptionally cold weather in January and the temporary effects of the government shutdown. With mortgage rates down significantly from last fall, we expect to see existing home sales bounce back and trend higher for the rest of the year. However, our forecast indicates that total home sales (new and existing) will remain down at 5.94 million in 2019 since home sales are starting the year at such a slow rate, before increasing to 6.14 million in 2020.”

However, home sales for the Austin MSA increased 1.5 percent for 2018 vs 2017. Median home price increased 3.7 percent to $305,900. 

Housing starts
Freddie Mac reports, “Housing starts averaged 1.25 million in 2018. Due to the recent increases in building permits, we anticipate that total housing starts will gradually increase over the next two years with most of the growth coming from single-family housing starts. We forecast that total housing starts will increase to 1.27 million units in 2019 and to 1.33 million units in 2020.”

According to Moody’s Analytics, “homebuilders have been underbuilding for more than a decade. Builders have been hindered by labor shortages, community opposition to high-density projects and growing costs of land, labor and materials. Plus, they’ve been building at the mid-to-high end of the market, not at the entry level. But it’s not all bad news. Builders are offering in­centives to buyers, and they’re slowly starting to build smaller, lower-price homes that are more affordable.”

Locally, Austin single family building permits increased 4.6 percent in 2018 over the previous year. 

Home equity

CoreLogic Homeowner Equity Insights 4th Quarter Report continues to see a rise in home equity. “U.S. homeowners with mortgages (roughly 63 percent of all properties*) have seen their equity increase by a total of nearly $678.4 billion since the fourth quarter 2017, an increase of 8.1 percent, year over year.”

A look at home prices

Home prices started to soften in mid-2018. Kiplinger’s Personal Finance recently reported, “Prices will continue rising, but more slowly, as the housing market regains some balance between buyers and sellers.”

Freddie Mac similarly reports, “After accelerating in recent years, home price growth in the United States has continued to moderate. In line with recent trends, we have lowered our home price growth forecasts to annual increases of 3.5 percent and 2.5 percent in 2019 and 2020, respectively.”

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SOURCES:

Freddie Mac – http://www.freddiemac.com/research/forecast/20190322_economic_growth.page?

Freddie Mac – http://www.freddiemac.com/pmms/

National Association of Realtors – https://www.nar.realtor/

Real Estate Center Texas A&M University – https://www.recenter.tamu.edu/data/housing-activity/#!/activity/MSA/Austin-Round_Rock

Moody’s Analytics – https://www.moodysanalytics.com/

Real Estate Center Texas A&M University – https://www.recenter.tamu.edu/data/building-permits/#!/msa/Austin-Round_Rock%2C_TX 

CoreLogic – https://www.corelogic.com/insights-download/homeowner-equity-report.aspx

Homeownership mortgage source: 2016 American Community Survey – https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/2016/

MReport – https://themreport.com/daily-dose/03-25-2019/important-drivers-home-sales

Kiplinger – https://www.kiplinger.com/article/real-estate/T010-C000-S002-where-home-prices-are-headed-2019.html

The Student Loan Bubble and Path Forward for Graduates

America’s total household debt increased by $193 billion (1.5%) to $13.15 trillion in the fourth quarter of 2017 according to the Federal Reserve. Student loan debt ranks as the second largest household debt falling behind mortgage, and in front of auto loans, credit cards and home equity loans.

Household Debt and Credit Developments as of Q4 2017

*Change from Q3 2017 to Q4 2017

**Change from Q4 2016 to Q4 2017

A closer look at student loan debt.

44.5 million student loan borrowers in the U.S. owe a total of $1.5 trillion as of March 2018 according to the Federal Reserve. And, the average college graduate with a bachelor’s degree left school with $28,446 in student debt in 2016 according to Institute of College Access & Success. In 2018, the Federal Reserve Bank of New York, reports 37.5% of Americans with student loan debt are under the age of 30. Compared to 62.5% of Americans with student loan debt are 30 years old or older.

CNBC recently reported “average debt at graduation is currently around $30,000, up from $10,000 in the early 1990s. The country’s outstanding student loan balance is projected to swell to $2 trillion by 2022, and experts say a large portion of it is unlikely to ever be repaid; nearly a quarter of student loan borrowers are currently in a state of delinquency or default.”

Although outstanding student loan balances have increased, student loan delinquency flows declined slightly but remain at a high level, according to the Federal Reserve. NerdWallet reports the following status on student loan repayments, painting a grim picture for some borrowers.

  • 3.3 million federal loan borrowers have loans in deferment.
  • 2.6 million federal loan borrowers have loans in forbearance.
  • 4.7 million federal loan borrowers have loans in default.

Will the student loan bubble burst?

Robert Farrington with Forbes explains how the student loan bubble will not burst, but instead will cause a slow market stagnation that we will see over time. “Student loans are a collateral on earnings, as long as there is earning potential, the ability to have the loans quickly “pop” via any financial mechanism is rare. Yes, bankruptcy for student loan debt is possible, but once again – rare… The net effect of this student loan crisis won’t be a bubble popping – it will be slow drag on the economy.” Discretionary income that would traditionally go to consumer goods and household spending stimulated by homeownership will instead be going to student debt repayment because there simply is not a discretionary income. This could cause a decline for some industries.

How student loans effects home ownership.

Student debt significantly cuts into future homeowners’ budgets and for many, making it difficult to buy a home. According to the Federal Reserve for every 10 percent in student loan debt a person holds, their chance of home ownership drops 1 to 2 percentage points during their first five years after school. According to the National Association of REALTORS more than 80 percent of non-homeowner younger millennials (born between 1990-1998) cite student loan debt as delaying a home purchase, compared to 86% of older millennials (born between 1980-1989).

What does this mean for graduates today?

NerdWallet recently analyzed the most recent numbers and issues concerning graduates, and conducted a survey by The Harris Poll in May 2018. In analyzing the data, Brianna McGurran, NerdWallet Student Loans Expert, believes the outlook for graduates is not gloom and doom stating, “New grads are in the best position of all: They have the chance to save smart from the beginning.”

Here is what they found for the Class of 2018 Money Outlook:

  • Percentage of recent graduates with student debt: 45%
  • Percentage of recent graduates with student debt who believe they’ll be able to pay it off in 10 years: 39%
  • Age at which graduates of the Class of 2018 can expect to retire: 72
  • Age at which the Class of 2018 can expect to purchase their first home with a 20% down payment: 36

As with any loan, whether for a student loan or a home, approach it as an educated consumer, here are some tips for paying off student loans for future graduates.

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SOURCE:
https://research.stlouisfed.org/publications/page1-econ/2018/10/01/get-an-education-even-if-it-means-borrowing
https://www.nerdwallet.com/blog/loans/student-loans/student-loan-debt/
https://www.newyorkfed.org/microeconomics/databank.html
https://studentaid.ed.gov/sa/about/data-center/student/portfolio
https://www.nerdwallet.com/blog/2018-new-grad-money-outlook/
https://www.cnbc.com/2018/09/21/the-student-loan-bubble.html
https://www.federalreserve.gov/econresdata/feds/2016/files/2016010pap.pdf
https://www.federalreserve.gov/econresdata/feds/2016/files/2016010pap.pdf
https://www.forbes.com/sites/robertfarrington/2018/12/12/student-loan-bubble-wont-burst/#3f9bf00f6768
https://www.newyorkfed.org/newsevents/news/research/2018/rp180213
https://www.forbes.com/sites/robertfarrington/2018/11/27/student-loans-and-bankruptcy/#41ee1633f45d
https://thecollegeinvestor.com/9664/student-loan-bubble-looks-like/
https://www.bankrate.com/loans/student-loans/repay-college-loans-fast/

Austin No. 1 City Gaining Company Migrations from California

Austin continues to grow from California residents and business relocations. A recent study by Joseph Vranich of Spectrum Location Solutions revealed more than 13,000 companies have left California for friendlier locations, with Austin being the No. 1 city to gain the California migrations. The study also ranked Texas as No. 1 in the Top 10 states gaining the most from California business relocations, a distinction Texas has held for the past decade.

“During the study period, $76.7 billion in capital funds were diverted out of California along with 275,000 jobs – and companies acquired at least 133 million sq. ft. elsewhere – all of which are greatly understated because such information often went unreported,” according to the study.

The Austin Business Journal summarized that “Departures are understandable when year after year CEOs nationwide surveyed by Chief Executive Magazine have declared California the worst state in which to do business,” said Vranich, a corporate relocation expert who jokes that he loves California’s weather, but not its business climate. Until recently, Spectrum and Vranich were based in Irvine, Calif. Texas, on the other hand, consistently ranks as one of the best states to do business in.”

The top 10 states starting in the order of those that gained the most from California business relocations were:

  1. Texas, which has held the first-place distinction for at least a decade
  2. Nevada
  3. Arizona
  4. Colorado
  5. Oregon
  6. Washington
  7. North Carolina
  8. Florida
  9. Georgia
  10. Virginia

The top 10 cities gaining company migrations from California were:

  1. Austin
  2. Reno, Nev.
  3. Las Vegas
  4. Phoenix
  5. Seattle
  6. Dallas
  7. Portland, Ore.
  8. Denver
  9. San Antonio
  10. Scottsdale, Ariz.


The report’s ranking is based only on cities, not metro areas. Fort Worth, Houston, Pittsburgh, Atlanta, Indianapolis and Nashville also ranked among the top twenty.

Vranich further details the Texas metro market migrations in the Austin Relocation Guide. Metropolitan areas benefiting from California divestment events show Austin-Round Rock-San Marcos in the top spot, followed by No. 2 Dallas-Fort Worth-Arlington, and No. 10 San Antonio, which was tied with Salt Lake City. Of the Top 15 destination metropolitan communities benefiting from out-of-California Austin tops the list, followed by No. 6 Dallas, No. 8 San Antonio, No. 11 Houston, No. 13 Irving and Plano (tied) and No. 14 Fort Worth.”

The new 2018 Migration Trends study by residential real estate brokerage site Redfin shows California is the top source of people from other metro areas shopping for homes in Austin. KVUE reported that in the Austin area, the biggest generator of inflow (more people seeking to move to area than leave it) was from San Francisco, unsurprising considering both cities are hubs for the technology sector. In Dallas, the L.A. area produced the most potential newcomers.

With the California migrations, it begs the question, how is Austin doing today?

The Austin Chamber of Commerce recently reported:

  • Austin added 36,800 net new jobs, growth of 3.5%, in the 12 months ending in December, making Austin the fourth fastest growing major metro.
  • In Austin, the industry adding the most jobs and growing the fastest is wholesale trade which grew by 6,900 jobs or 12.8% over the last 12 months. Also growing at faster-than-average rates are construction and natural resources (8.1% or 5,000 jobs) and other services (4.4% or 2,000 jobs).
  • Austin’s seasonally adjusted unemployment rate is 2.9%, up from 2.8% in November. Unemployment has been at or below 3.0% for the last 16 months.
  • For new home construction Austin ranked number 1 in the nation in per capita building permits through midyear 2018 with a projected increase over 2017.
  • Home prices are rising with a median home price increase of approx. 4% in 2018.
  • Incomes are rising with total personal income in the Austin metro growing by 6.4% in 2017, the 5th fastest growth rate among major metros.

We continue to see growth in Austin, and we welcome California transplants to make Austin their home.

For more stories like this, please subscribe to Tandy on Real Estate.

Resources:

Austin Business Journal – https://www.bizjournals.com/austin/news/2018/12/13/1-800-companies-left-california-in-a-year-with.html 

The Kumar Law Firm – https://thekumarlawfirm.com/lawyer/2018/12/31/Business-Law/California-Businesses-Flock-to-Texas_bl36525.htm

KVUE – https://www.kvue.com/article/news/local/california-homebuyers-continue-coasting-into-austins-real-estate-market/269-608008889 

PRWeb – https://www.prweb.com/releases/record_number_of_companies_departing_california_study_urges_more_to_leave/prweb15977005.htm

Redfin – https://www.redfin.com/blog/2018/10/q3-2018-migration-report.html

Culture Map – http://austin.culturemap.com/news/real-estate/10-25-18-homebuyer-interest-in-austin-california-san-franscisco-redfin/

Austin Chamber of Commerce – https://www.austinchamber.com/blog/01-22-2019-job-growth-unemployment

Austin Chamber of Commerce – https://www.austinchamber.com/economic-development/business-climate/economic-perspective

Austin Relocation Guide – http://www.austinrelocationguide.com/Austin-Wins-Big-as-Companies-Leave-California/

Real Estate Agent and Broker are Found Liable for Wire Fraud Loss

A Federal Court upheld a jury’s finding that a real estate agent and broker were 85% responsible for a wire fraud that cost their client $196,622.67 (Bain v. Platinum Realty, LLC, Dist. Court, D. Kansas 2018).

Jerry Bain was working with a real estate agent to purchase a property. To fund the purchase, Bain was instructed to wire $196,622.67 to the title company. Unbeknownst to the parties involved, a criminal was intercepting e-mails exchanged between the title company, agent, and Bain. Bain had actually been sent hacked wiring instructions, which instructed him to wire funds straight to the criminal’s account. Once the funds were sent they could not be recovered and so Bain sued the agent, broker and others.

In finding the real estate agent and broker liable, the court emphasized several points which can provide valuable lessons to all agents:

  • The real estate agent was serving as the middleman between the settlement agent and her client. Serving in this role made her responsible for the delivery of accurate instructions to her client.
    • Real Estate agents should not be involved with wire transfer instructions!  Buyer’s and Seller’s should communicate directly with the title company.
  • The agent did not alert the other parties to the transaction when she learned her e-mail account had been compromised.
    • If your email account is compromised, you have an obligation to notify the parties involved.  Make sure you notify clients, title companies and lenders promptly.

Wire fraud criminals continue to improve their approach to tricking buyers and other parties into wiring funds to them by a variety of schemes.  These include phishing emails, compromised email accounts, and impersonating title companies and agents on email, text and by phone.  Real Estate agents must implement best practices regarding their clients wiring funds.  Learn more about how to protect yourself at the following links:

More Opportunities for Wire Fraud

The latest FBI reports show that criminals are getting better at stealing money through fake emails and scams:
·         An increase from 20,000 incidents of wire fraud through Business Email Compromise (which includes all types of email phishing) for 3 billion in 2015 to 40,000 reported incidents for 5.3 billion in 2016.

The FBI also reports that international criminal organizations now employ linguists, attorneys, real estate professionals, programmers, IT specialists, social media experts and anyone else needed to perfect their frauds.
Fraudulent emails with good grammar and professional looking email signature graphics are now common. Non-email methods may include communicating via phone, text messaging, and chat programs or applications. Fraudulent texts from the criminals pretending to be the REALTOR® or other parties to the transaction are now used.
In a recent example, fake closer sent fake wire instructions to fake agent. Fake agent then sent a fake text to the homebuyer saying she had just received the wiring instructions from the title company and would be forwarding the wire instructions to the buyer shortly. Fake agent then forwarded the fake title company email to the homebuyer requesting down payment funds be sent (to the criminal’s bank account) before the day of closing.  All of the fake emails and fake texts were well written and time stamped to seem like they were real.
Criminals are even calling the buyer pretending to be one or more of the parties to the transaction.

Preventing wire fraud
• The agent, title company and lender should talk to the buyer about how money is wire transferred – not just rely on written wire fraud warnings.  The buyer must understand that they should never rely on emailed wire instructions without first calling a verified phone number.
• Cashier’s checks are a great option
• All users involved in the real estate transaction, including agents, should implement two-factor authentication, use long pass phrases as their password and should change their password often (and immediately change their password if they see evidence of phishing or fake emails involved in one of their transactions)

On a side note, criminals can even trick Alexa and Siri into stealing money for them. See: “Alexa and Siri Can Hear This Hidden Command. You Can’t. https://nyti.ms/2G2RrgW.”

Austin Ranks No. 1 on Nation’s Best Places to Live

Two years running Austin is number one on the nation’s Best Places to Live according to U.S. News and World Report. For those of us who are Austinites and who are working in real estate, we know this to be true.

Austin took the lead again in the magazine’s 2018 edition of its Best Places to Live in the U.S. list, which ranks 125 major metro areas in four categories including desirability, value, job market, quality of life and net migration.

Check out the Top 10 cities.

2018 Top 10 “Best Places to Live”

  1. Austin
  2. Colorado Springs, Colorado
  3. Denver
  4. Des Moines, Iowa
  5. Fayetteville, Arkansas
  6. Portland, Oregon
  7. Huntsville, Alabama
  8. Washington, D.C.
  9. Minneapolis-St. Paul, Minnesota
  10. Seattle

“When deciding on a place to settle down, it’s important to understand that where a person lives can impact their well-being,” said Kim Castro, executive editor at U.S. News. “U.S. News created the Best Places to Live to highlight areas across the country that have the characteristics residents are looking for, including steady job growth and affordability. The top-ranked places are areas where citizens can feel the most fulfilled socially, physically and financially.”

And, Austin is not stopping it’s growth, according to the Austin Business Journal Austin’s population keeps growing. In fact, there were 151 additions to the population a day in 2017, down only slightly from 159 in 2016.

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SOURCE:
https://www.cnbc.com/2018/04/10/us-news-world-report-the-10-best-places-to-live-in-the-us-in-2018.html
https://realestate.usnews.com/places/texas/austin
https://www.bizjournals.com/austin/news/2018/04/10/austin-no-1-again-on-revered-best-places-to-live.html?ana=e_ae_set1&s=article_du&ed=2018-04-10&u=CuOUKGCJY978Qy2wnhw9SA0f338830&t=1523397950&j=80955401
https://www.bizjournals.com/austin/news/2018/03/22/austins-population-keeps-popping-heres-how-many.html

How industry professionals can avoid and respond to wire fraud

Wire fraud has become rampant in our industry. The FBI has estimated that there are over 4,000 hack attempts per day nationwide. According to the Financial Crimes Enforcement Network (FinCEN) there have been 22,000 cases of reported wire fraud involving losses of over $3.1 billion dollars since 2013.

The real estate industry has been targeted by fraudsters because our business moves at a quick pace with a lot of funds on a regular basis. The criminals continue to strengthen their efforts to abscond with buyer, seller and REALTOR money. Below are some tips for how we can help educate our buyers and sellers about how important it is to be cautious in their transactions.

1. Consumer education.

The biggest key to prevention is education of your customers. As a REALTOR you should be laser focused on educating the buyers and sellers about the growing risks of wire fraud. At every opportunity take the time to explain that wire fraud has become prevalent and explain how we, the title company, will deliver wiring instructions. Buyers and Sellers should understand that if they receive a phone call, fax or email regarding wiring of funds, they must call a previously validated phone number to verify the funding information. Always caution the client about contacting the title company from an email signature. Criminals have become sophisticated at sending fraudulent communications pretending to be the REALTOR, the title company and the lender. criminals send emails with identical looking signature blocks of one of the parties to the transaction but replace with phone numbers the criminal will answer if someone calls. A good tip is to ask your clients to program our phone number into their cell phones when they go under contract. This way they are only calling us on a trusted phone number and not from any other resource.

Buyers should be forewarned by their REALTOR that no one in the transaction should send them wiring instructions other than the title company. Even when the title company sends wiring instructions it should be only upon request from the customer and the customer should never initiate a wire without personally calling the title company from a verified phone number to verify the wiring instruction data.

A REALTOR should never take on the responsibility of sending wiring instructions to their clients. After having the conversation with your client to educate them on the red flags of wire fraud it is highly advisable that you have a disclosure signed by them confirming your conversation that includes a reminder to never send funds without contacting the title company first at a trusted number to confirm the instructions.

On the seller side of the transaction, you should counsel the clients to bring a physical copy of their wiring instructions to closing. The sellers should not email their account information out. Instead they should bring the instructions to closing. All sellers should be counselled to not respond to email inquiries requesting their account number or wiring information.

Also, make sure that we have your buyer or seller’s phone number. When we receipt the contract we will call your buyer and seller to talk to them about the transaction. We will reiterate the warnings that you are giving them and we will help remind them how important it is to follow our instructions.

2. Contacts Log.

Before you go under contract create a log of all approved parties’ phone numbers to give to your buyer or seller. Providing the clients with a verified phone number to use at the beginning of the transaction is a must. Programming the title company number into their phone should help minimize the possibility of a fraudster sending them a different phone number to use via email.

3. Confirmation of wire instructions for REALTORS.

Many REALTORS today have a portion of the commission wired. If you fall into that group make sure you are available by phone to verify the wiring instructions. Criminals are hacking emails and sending in fake wiring instructions for commissions too!

4. Two-Factor Authentication.

You should implement Two-Factor Authentication. All parties to the transaction, especially real estate agents, should be encouraged to enable Two-Factor Authentication on the email service they utilize, especially real estate agents using public domain email systems such as Yahoo and Gmail. This site lists systems that implement Two-Factor Authentication: https://twofactorauth.org/. After you have turned on your Two-Factor Authentication make sure to change your password one time to clear out any prior access.

5. Secure email.

All email involving nonpublic, private and confidential client information should be sent utilizing secure email systems. Here is an article from the National Association of REALTORS (NAR) regarding NAR Best Practices https://www.nar.realtor/articles/internet-security-best-practices.

6. Cyber protections.

REALTORS should implement industry standard IT security and cyber protections of their email and computer systems including but not limited to: 1) utilizing strong antivirus software, 2) installing security patches for all operating systems and software applications, 3) logging out or locking their computer when leaving their computer unattended, 4) avoid clicking on suspicious links on websites or within emails and 5) avoid using free WIFI or free charging stations. Free WIFI pretending to be legitimate businesses is often operated by criminals and allows them to access everything being transmitted over WIFI.

When fraud happens. If you suspect a fraud is underway or has happened, act immediately! Contact as many people in your management team as well as at the time company. The bank and FBI need to be contacted immediately among other steps that must be taken. The Cybersecurity unit of the Department of Justice has published the following guidelines for reporting cyber incidents: https://www.justice.gov/sites/default/files/opa/speeches/attachments/2015/04/29/criminal_division_guidance_on_best_practices_for_victim_response_and_reporting_cyber_incidents2.pdf

Sources:

ALTA Wire Fraud Resources:
http://www.tlta.com/TLTA/News_Articles/ALTA_Releases_Several_Resources_to_Help_Protect_Title_Companies_and_Customers_From_Wire_Fraud.aspx
ALTA notice about phishing emails: https://www.alta.org/news/news.cfm?20170801-Phishing-for-Wire-Transfers
ALTA Wire Fraud Red Flags: https://www.alta.org/news/news.cfm?20170725-Red-Flags-to-Protect-Your-Company-Against-Wire-Fraud
ALTA Sample Wire Fraud Warnings: https://www.alta.org/news/news.cfm?20170725-Sample-Wire-Fraud-Warnings-You-Can-Use
FBI’s Public Service Announcement regarding Business Email Compromise: https://www.ic3.gov/media/2017/170504.aspx

Our executive team at Texas National Title is committed to helping our clients talk to customers about preventing wire fraud. David Tandy (CEO) and Latra Szal (COO/Counsel) have been teaching many classes on the topic to local REALTOR groups. If you would like to schedule a class or conference for your office to discuss further please let me know and we will get something scheduled.

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Is public WIFI too good to be true?

We love the idea of public WIFI. It is everywhere. It is free. It is easy to connect to. It is convenient. But, is it too good to be true? According to Harvard Business Journal, “over half of the adults in the U.S. have their personal information exposed to hackers each year.” And, 89% of all cyber attacks involve financial or espionage motives according to Verizon’s annual Data Breach Investigation Report.

Hackers love free WIFI
Those same reasons why we love public WIFI are also why hackers love it too. With public WIFI, hackers can get unfettered access to unsecure networks full of personal information they can then use to hack into your life and business. They position themselves between you and your connection point. They then see everything you are sending to the hotspot and pass it on. In this position, they will see anything you transmit over the WIFI network, your email, username and passwords, credit card information, business network credentials… Once they have access to this information they can use it at their leisure and access your systems. Hackers also use unsecure networks to distribute malware which can infiltrate your computer.

One mistake people make using public WIFI

According to USA Today, “If I’ve said it once, I’ve said it a thousand times: Avoid doing anything you would not want anyone in the world to know on public WIFI. You may think you’re safe in that busy café or big-name hotel, but public WIFI is a major liability.” You never know when someone has spoofed a reputable brand’s WIFI network. USA Today’s Stephen Petrow was hacked on a plane, click here for his story. This could happen to anyone.

REALTORS® Beware

Jessica Edgerton, National Association of REALTORS Associate Counsel, warns REALTORS®, “Do not do business over free WIFI” in the NAR training “Wire fraud scams: how to protect your buyer clients”. There is just too much at risk in a real estate transaction to take a chance on an unsecure network.

Below are some steps to help safeguard yourself.

How to safeguard yourself and your business when using public WIFI
The vast majority of hackers are simply going after easy targets. Taking the following precautions should help to keep your information safe.

  1. Be aware

Now that you know that public WIFI is not secure – be cautious and remember that any device can be at risk. This includes your laptop, smartphone or tablet. Be suspicious of wireless networks, and refrain from connecting to unknown or unrecognized wireless access points.

  1. Use a VPN

Make sure to use your Virtual Private Network (VPN) that most businesses use for corporate email and Internet access through an unsecured connection, like public WIFI. This is your first line of defense when on public networks. If hackers do manage to get between you and your connection, the data will be heavily encrypted through the VPN and you will not be an easy target.

  1. Use SSL connections

When you are web browsing make sure you enable to “Always use HTTPS” option on websites you use frequently or that require you to enter credentials. Hackers are smart and if they catch a username and password they will try all of the variations knowing that it will more than likely lead to a password to your online banking, corporate network, or other accounts. Remember, you never want to enter your usernames and passwords in an unencrypted manner. This opens the door for hackers.

  1. Turn off sharing

When using the Internet on public WIFI, turn off your sharing in System Preferences or in your Control Panel. It is unlikely that you will want to share, so best to be safe. You can also let Windows do this for you by choosing the “Public” option when you first connect to the new network.

  1. Avoid using specific types of websites

In the event that you do use public WIFI, avoid going to sites where a cybercriminal could capture your information, i.e. online banking, social media sites, online shopping… If you have to access one of these sites, then use your mobile phone network versus the public WIFI to help protect yourself.

  1. Turn off WIFI when you are not using it
    Even if you are note actively connected to a network, the your WIFI hardware is still transmitting data between any network within range. To be safe, when you are not on the Internet, turn your WIFI off. Work offline until you need to connect. Another benefit to this is you can help to save your battery life too.
  2. Protect yourself

Keep an Internet security solution running on your laptop to constantly scan for malware.

Secure your home wireless network

Having a home wireless network is awesome. You can work from anywhere in your home. It is easy, and becoming a standard in new smart homes. Make sure that you protect yourself at home too.

  1. Don’t use the default password.

Make sure to change from the default password and use a complex password. Click here for tips for creating strong passwords.

  1. Turn off SSID (Service Set Identifier) broadcasting.

This will keep your wireless device/network from announcing its presence to your neighbors and the world.

  1. Change your device’s SSID name.

Change the default SSID name of your device. It is easy for hackers to guess your manufacturer’s default SSID name of your device. Make is harder by changing the default SSID name. And, remember to pick a name that is not easily identified.

  1. Use encryption.

In your connection settings, enable encryption. WPA encryption was the best, but even WPA2 was recently cracked. For the time being there is no safe public WIFI. To protect yourself, you must use a VPN service if you want to hide unencrypted traffic.

  1. Protect yourself.

Make sure you have a great anti-malware product on all of your home computers and devices. When you set this up, remember to set it up to auto-renew so you do not go unprotected. Also, find a great IT resource to help you routinely review your computer and devices to ensure you are running optimally and that you do not have anything running in the background on your computer to compromise you or your network.

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SOURCE:
https://hbr.org/2017/05/why-you-really-need-to-stop-using-public-wi-fi
http://www.verizonenterprise.com/verizon-insights-lab/dbir/2017/
https://www.usatoday.com/story/tech/columnist/2017/08/18/one-mistake-people-make-using-public-wi-fi/577791001/
https://www.usatoday.com/story/tech/news/2016/02/24/public-wifi-gogo-steven-petrow-hack-airplane-email-columnist-vpn/80873010/
http://rebac.net/sites/default/files/Wire%20Fraud%20Scams%201.pdf
https://www.howtogeek.com/204697/wi-fi-security-should-you-use-wpa2-aes-wpa2-tkip-or-both/
http://tandyonrealestate.com/cybersecurity-creating-strong-passwords/
https://www.gizmodo.com.au/2017/10/wi-fis-most-popular-security-method-might-be-broken/

 

 

The multi-faceted Millennial

In the Consumer Housing Trends Report 2016 the Zillow® Group covered the multi-faceted Millennial.

I found the report enlightening, debunking some of the myths about millennials, and uncovering that I may be a Millennial at heart.

Zillow stressed the importance of home and community for millennials. According to the report millennials under the age of 25 see their home “as a reflection of themselves rather than a financial investment”. This is unlike the older Baby Boomer generation who sees their home as a financial investment and avenue to build wealth for the future and for their family. In addition, more than 55 percent see themselves as involved in their community. They are active in their neighborhoods and the surrounding areas, not so much unlike my Baby Boomer friends.

Zillow confirmed that millennials are “delaying many life milestones that precede home ownership.” They are completing their education, marrying and starting a family later in life, and as a result renting

Further into their adulthood. Here are the stats Zillow revealed:

  • Two-thirds of millennial buyers concurrently consider renting while shopping for a new home.
  • One in three Millennials seriously consider renting.
  • When Millennials buy they “leapfrog the traditional “starter home” and jump into the higher end market by choosing larger properties with higher prices, similar to homes bought by older buyers.”
  • They pay a median price of $217,000 – more than Baby Boomers and 11 percent less than Generation X.
  • The Millennial median home size is 1,800 square feet – similar in size to what older generations buy.

The report also debunked the myth that Millennials are only urban dwellers. According to the report:

  • One quarter of Millennial homeowners live in an urban area.
  • Nearly half of all Millennials live in suburban communities.
  • 8 in 10 adults under 25 living outside an urban core.

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SOURCE:
Zillow® Group Consumer Housing Trends Report 2016

 

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