All real estate business owners, agents and buyers should be aware of the different kinds of real estate fraud that has been going on for years. It could be from mortgage fraud and keeping secrets concerning a real estate invest in order to extort money. Since there’s a huge amount of money and persons involved in the real estate market, its transaction has also made prey of many gullible individuals.
Nowadays, the trendy use of technology in real estate business has made transactions so easy, fast and effective. Technology, in fact, has made the whole process less stressful than the pre technology days. However, the use of technology has influenced fraud in so many ways, making digital fraud on of the highest problems in the real estate industry.
Nevertheless, there’s been a development used in combating fraud in several ways. There’s something called Blockchain which although may not defeat all fraud in real estate, it has the ability to protect sellers, buyers and vendors.
Kinds of Digital Fraud in Real Estate
Because of its fast and reliable services our digital devices offer us, we’ve become so comfortable to let our guards down concerning fraud in the online world. This fraud, in real estate, is more than just losing valuable information and causing inconveniences to the victims. It can result to loss of thousands and millions of money or worth of properties.
The most familiar kinds of fraud include:
- Identity fraud (the buyer or seller could be misrepresented or worse an impostor)
- Property fraud (when properties information are miscalculated or totally wrong)
- Disclosing fraud
- Real estate debt fraud
- Transaction fraud.
- Occupancy fraud.
These kinds of fraud are as old as real estate business itself. Recently these ways of doing fraud have been developed through tactics from the digital world. Examples are malware attacks, phishing, escrow fraud et cetera.
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Phishing is a huge problem in the business. It occurs when a hacker poses as a legit vendor in the real estate market. Here, the hacker can gain access or even control of confidential information and data which leads to fraud and unauthorized transactions and transfer of money.
As the word implies, block refers to information while chain means network. Professionals have depended on blockchain because it provides solutions to online fraud.
It happens this way. The blocks contain data or information concerning transactions and the individuals involved in the transactions have a special pass code (a code for identifying). Blocks are added to the chain whenever a new transaction is made. All are stored after verification and given a hash.
This procedure is very hard for a hacker to have access to valuable information since he needs to gain access to all blocks in the chain which involved lots and lots of computers. However, blockchain doesn’t edit blocks, but validates its transactions. Hence providing its security.
How does Blockchain decrease the rate of real estate fraud?
The information and data in real estate transactions have a central body, which makes it easy to be targeted by online fraud. Blockchain with its specific method decentralizes the central body and provides security.
In mortgages, blockchain secures the different parts and pieces of the mortgage since information is stored in the blocks; it is much safer and free from fraud. Information or transactions can also be recorded permanently in Blockchain security. This procedure gives a greater assurance of security.
Blockchain is capable of offering accurate real estate data origin that gives more confidence to the individuals involved. Although Blockchain is just starting to thrive, it has proved itself worthy to many establishments and industries. Make use of it and be assured that your establishment is online fraud-free.