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Real Estate Fraud Is On The Rise

by Eric Seyboldt 

Buying a home is a landmark event full of excitement and promise, but it’s also becoming a prime opportunity for cybercriminals to strike, causing significant financial damage to unsuspecting victims. According to a recent 2024 State of Wire Fraud report by a leading wire fraud protection firm, an alarming number of Americans—1 in 20—have experienced some form of real estate fraud in the past three years. The typical financial loss? A staggering median amount exceeding $70,000, often wiping out a buyer’s down payment or a seller’s profits.

Fraudsters are becoming increasingly adept at manipulating the real estate transaction process. They access public databases, breach real estate brokerage and title agency systems, and craft convincing impersonations of parties involved in property deals. Their methods are growing more sophisticated, making it harder to detect the deception until it’s too late.

Case Study: An All-Too-Common Email Compromise

Consider a typical scenario where a couple was finalizing the purchase of their dream home. Just two days before closing, they received an email, seemingly from their title company, notifying them that they would soon get wiring instructions for the down payment. The following day, they received another email complete with wiring details that appeared to come from the same source. Trusting the communication, they transferred $28,000.

However, during the closing meeting, it was revealed that the money never reached the title company. The second email, which looked nearly identical to the first, was actually from a criminal who had cleverly altered the sender's email address to commit fraud. Luckily, in this rare instance, the couple’s bank detected suspicious activity and was able to halt the transaction, preventing loss.

According to FBI statistics, such business email compromises resulted in record losses of $446.1 million from real estate transactions in 2022. These crimes are not only becoming more frequent but also more sophisticated, thus more difficult to prevent.

Industry Response and Consumer Awareness

Despite the increasing frequency of these scams, the same report from the wire fraud protection firm found that over half of homebuyers and sellers were not aware of these fraud risks until it was too late. Moreover, 60% said they received little to no information about potential fraud from their real estate professionals.

There is a strong call within the industry for better consumer education and enhanced preventive measures against wire fraud. Real estate professionals are urged to inform their clients about these risks thoroughly and adopt more secure transaction methods, such as direct verbal confirmations and the use of certified checks instead of wire transfers.

As the spring real estate season approaches, bringing with it a surge in market activity possibly tempered by fluctuating interest rates, the urgency for vigilance against such scams cannot be overstated. Both industry insiders and consumers need to be proactive in safeguarding their investments against the evolving threat of cybercrime in real estate. This case highlights the vital need for improved security protocols and more robust education efforts to protect everyone involved in buying or selling property.

Reach out to us for a complimentary, 10-minute consultation call. Let's explore together how we can help you maximize your income in retirement, ensuring your golden years are as fulfilling and worry-free as you’ve always imagined. Email Eric at [email protected] or give us a call today to schedule your consultation. Let's make your retirement dreams a reality!

Client Q & A of the Week - What’s More Important?

Client: Mark, as I get closer to retirement I wonder, is preserving my assets more important than growing them?

Mark: The question reflects a core concern for many at this stage of life. It's crucial to approach this with a nuanced understanding of personal financial goals, risk tolerance, and the time horizon over which your assets will be utilized.

In retirement planning, both asset preservation and asset growth play pivotal roles. However, the emphasis placed on each can vary significantly depending on individual circumstances. Let's discuss how you can think about balancing these two priorities, drawing upon the principles of the Balanced Portfolio Theory.

Balanced Portfolio Theory, at its heart, advocates for an investment strategy that balances risk and return by diversifying across different asset classes. This diversification is critical as you near retirement. It’s not merely about choosing between growth and safety; it's about intelligently blending the two to support your financial needs and lifestyle both now and in the future.

As you transition to retirement, preserving capital becomes increasingly important. The reason for this is straightforward: as your earning capacity diminishes, the ability to recover from significant financial losses diminishes as well. Therefore, a shift towards more conservative investments, such as Real Assets (think Gold or our private equity offering of Bourbon via The Bourbon Reserve) or dividend-paying stocks, might be advisable. These types of investments can provide a steady income stream and are generally less volatile than growth-oriented assets.

However, it's also essential to maintain a certain degree of growth orientation in your portfolio. This is particularly important given the increasing longevity of retirees today. Living longer means that your retirement savings need to last for an extended period and must keep pace with inflation over time. Here, having a portion of your portfolio in growth assets, like stocks, is beneficial as they offer the potential for higher returns over the long term, thereby helping to ensure that your purchasing power is not eroded by inflation.

In conclusion, the decision between focusing on asset preservation versus growth should not be seen as an either/or choice but rather a balanced approach tailored to your specific financial situation. An effective retirement strategy often involves crafting a portfolio that includes both stable, income-generating assets and those with potential for appreciation. Having a conversation with us to regularly review and adjust your portfolio can be very beneficial. This strategy allows you to respond dynamically to changes in the market and your personal life, ensuring a balance that meets your needs throughout retirement.

Remember, every pre-retiree's situation is unique, and the right balance can significantly differ from one individual to another. Hence, understanding your long-term financial goals and being adaptable with your strategy are key to a successful and secure retirement.

Reach out to us for a complimentary, 10-minute consultation call. Let's explore together how we can assist you in optimizing your Medicare options and healthcare strategies, ensuring your health needs are met efficiently and affordably as you age. Email Eric at [email protected] or give us a call today to schedule your consultation.

Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

Here are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured): No changes from last week

3- year: 5.70%

5-year: 6.15%

Please feel free to email Eric at [email protected] if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy 

Is Your Retirement Portfolio Positioned To Weather The Storm?

As the US Dollar faces a historic downturn, and inflation climbs to levels unseen in decades, many Americans are urgently seeking effective strategies to safeguard their retirement funds against the tempest of today's economic and geopolitical turbulence.

Amid concerns ranging from spiraling debt limits and soaring interest rates to unprecedented government spending and the erratic behavior of financial markets, navigating your financial future can feel like choosing between the lesser of many evils. But what if there was a way to not just navigate but thrive?

A growing number of savvy investors are turning to tangible assets as a bulwark against economic uncertainty. Whether it’s converting part of your IRA or 401(k) into physical gold, or even barrels of Bourbon, these real assets offer a compelling protective strategy.

During periods of loose monetary policies and inflation spikes, or even in economic downturns, real assets like gold and Bourbon have historically outperformed. They not only offer a hedge against crises but also present an excellent diversification opportunity in more stable times.

Considering the volatile state of today's economy, investing in the “Real Assets” category could be the strategic move that fortifies your financial future. Ready to explore how these tangible assets can elevate your investment portfolio? Let’s connect to pave your path to a more secure and prosperous retirement.

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To A GOLD IRA (link below) or a BOURBON IRA (www.bourbon.fund/how-it-works/) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. It’s easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

We have a lot of great information, as well as podcasts from our radio show ‘The Financial Insider’, and tools on our website - www.novusfg.com.

[email protected] www.novusfg.com [email protected]

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser. CreativeOne Wealth, LLC and Novus Financial Group are unaffiliated entities.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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