Keep an Eye Out for At-Risk Senior Clients
As America’s population ages, more of your real estate clients are likely to be seniors. As a result, you may run into cases where your senior clients have become targets of financial fraud.
Financial fraud is rapidly becoming the top form of abuse against seniors. According to True Link Financial, an estimated 40 percent of seniors fall victim to fraud in any given five-year period. In addition, the Federal Trade Commission found that roughly 1.8 percent of fraud cases against seniors resulted in the loss of a home or other major asset.
Every state has laws that criminalize financial abuse against seniors. Despite the consequences for criminals, unscrupulous individuals continue to take advantage of seniors. You should be aware of potentially high-risk schemes, given that these cases often involve real estate.
Foreclosure-rescue, reverse mortgage, and property investment deals are the main areas in which companies and individuals target older people to exploit. In some cases, a close family member or friend can exert undue influence over an elderly homeowner, convincing him or her to sell a property with consequences that are often disastrous for the victim.
As a Realtor, it is your job to watch out for these scenarios to ensure that your elderly clients are not acting against their own wishes.
“If you remain vigilant for the signs of financial abuse, you’ll avoid becoming embroiled in real estate transactions—and possible legal actions—involving criminal or unethical exploitation of the elderly,” says Jessica Edgerton, NAR associate counsel.
To protect yourself and your clients against financial abuse, here are a few steps to follow on every real estate transaction.
Document all conversations and follow up at every stage of the transaction. You should provide both oral advice and a transcript of every important conversation.
- Know your client. Don’t allow yourself to be distracted by family members who attempt to make decisions on behalf of an elderly homeowner.
- Understand powers of attorney. If a family member or friend claims to represent a senior homeowner pursuant to a power of attorney, demand a copy and ask an independent lawyer for verification of its legitimacy and applicability to the real estate transaction at hand. You should be especially wary if the so-called representative stands to gain financially from the transaction.
- Familiarize yourself with the signs of elder abuse. The Federal Administration on Aging has provided a wealth of information on the signs of elder abuse.
- Educate your team and clients. Brokers should be certain that their agents are educated about real estate–related exploitation of the elderly. If your firm works with senior clients regularly, you and your agents may also want to consider taking continuing education courses in order to receive Senior Real Estate Specialist designation.
- Report suspected abuse. Report abuse to a local Adult Protective Services agency in your area, or visit aoa.gov for further information.
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In this issue:
How Trump’s Tax Plan Will Impact Real Estate
Average Real Estate Commissions Decline to Low 5 Percent Range
Consumer Sentiment Declines in January but Remains Near 13-Year High
Foreign Real Estate Investors Still Confident About U.S. Real Estate
Mortgage Applications Decline 12 Percent to End 2016
New Report Names CEO of Zillow as Most Powerful Person in Residential Real Estate
Rising Home Values Haven’t Shaken Consumers’ Memories of the Financial Crisis
U.S. Real Estate Sales Could Be Affected by China’s Capital Controls
Trump Administration Suspends Mortgage Premium Rate Cut
Keep an Eye Out for At-Risk Senior Clients
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