Technology Survey: Will You Help Us Help You?

Do you rely on technology to conduct your brokerage activities? Have the advancements in technology made you feel like you have been left behind?

The Commission is aware that technology has consistently impacted the practice of real estate brokerage over the past several years. Some brokers have expressed their frustration about the challenges they face while conducting brokerage activities.

In an effort to determine the need for educational materials to meet the technology needs of brokers in North Carolina, and the best source of those materials, the Commission is asking for your assistance in completing a survey. This survey will take approximately 3-5 minutes to complete and your responses will remain anonymous. The Commission values the input of the brokerage community and would like to thank you in advance for your participation.

The deadline for survey submission is Monday, December 12, 2022.

You can access the survey here.

If you have any further questions or comments, please contact the Education and Licensing Division at 919.875.3700 or educ@ncrec.gov.

Current Stats: Monthly Licensee Count as of November 1, 2022

Disciplinary Actions

JOSEPH DAVID CANDELARIA (CONCORD) – By Consent, the Commission suspended the broker license of Candelaria for a period of 6 months, effective December 1, 2022. Commission found on February 4, 2022, Candelaria timely submitted a criminal conviction form reporting four felony convictions of possession of marijuana, but failed to timely respond to two Letters of Inquiry. Candelaria failed to report four additional drug related misdemeanor convictions in 2016 as well as a probation violation. 

ANDREA VACAFLOR AYOROA (CHARLOTTE) – By Consent, the Commission reprimanded Ayoroa, effective December 1, 2022. The Commission found that in or around February 2022, Ayoroa acted as a buyer’s agent for a client who contracted to purchase a vacant lot. After the termination of the contract, Ayoroa’s buyer-client filed a complaint with the Commission against the listing agent. During the course of the investigation of the initial complaint, Ayoroa failed to timely provide a substantive response to multiple Letters of Inquiry.

CHRISTINE D COX (HICKORY) – By Consent, the Commission suspended Cox for ninety (90) days, effective September 20, 2022.  The Commission found that Cox acted as a listing agent for residential property located on a lake and included a boat dock. After the property went under contract, it was discovered that the boat dock lacked a tag and it was further discovered that the boat dock was not permitted. The buyers terminated the contract a few days later without expending any funds. Respondent disclosed the lack of permit issue to the next buyer. During the course of the investigation, Cox failed to timely reply to multiple letters of inquiry.

Employment Opportunities Available

Are you interested in joining the staff of the North Carolina Real Estate Commission? From time to time, employment opportunities become available. They are posted on the Commission’s website under the “About Us” tab.

The Real Estate Commission is currently searching for an attorney to serve as Associate Legal Counsel II to prosecute cases before the Commission involving allegations of violations of the Real Estate License Law and Commission rules.

Click here for more information.

Staff Appearances

Janet Thoren, Director of Regulatory Affairs, Len Elder, Director of Education and Licensing, and Mike Gray, Chief Auditor, spoke at the North Carolina Association of Realtors Convention on October 18.

Janet Thoren, Director of Regulatory Affairs, Kristen Fetter, Deputy Legal Counsel, Mike Gray, Chief Auditor,and Chad Wilson, Auditor-Investigator, spoke at the ARELLO Regulatory Investigator Seminar on November 1-3.

Fred Moreno, Chief Deputy Legal Counsel, spoke at the Greensboro Regional REALTORS meeting on November 1.

Sheryl Graham, Consumer Protection Officer, spoke at the Keller Williams Realty office meeting on November 9 and at the Brunswick County Association of REALTORS office meeting on November 17.

Bruce Rinne, Information Officer, Brian Heath, Consumer Protection Officer, spoke at the Longleaf Pines REALTOR Association meeting on November 22.

Diversity, Equity, and Inclusion Updates

As a part of the Commission’s ongoing effort to combat discriminatory behavior in real estate brokerage we are committed to evaluating the annual Update courses to include relevant topics and resources. To this end, the 2020-2021 General Update Course included substantial material on fair housing, and the 2021-2022 Update Course included substantial information on racial equity. This material can serve as a great resource and is available for reference on the Commission’s website.

Fake Seller / Fake Buyer Scam Alerts

By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer

The North Carolina Real Estate Commission has been receiving an increasing number of calls about fraudulent buyers and sellers attempting to scam innocent people, attorneys, and lenders out of due diligence fees, properties, or mortgage payoffs. These scam artists can be located anywhere in the world, yet claim they are local. Here are a few recent examples of calls we received, red flags to alert you to a potential scam, and potential action you can take to reduce risk.

FSBNO – For sale by NOT the owner

            A neighbor was driving by a parcel of land adjacent to their own and noticed a For Sale By Owner sign but did not recognize the phone number on the sign. Suspicious, the neighbor, who knew the property owner, called the owner with the phone number the neighbor already had and asked if they were selling. The owner said ‘No’ and called the police to take down the sign and investigate.

            Action you can take:

1.  If your client is interested in an FSBO, while you may not be able to verify that the phone number on the sign is correct, you can look up the owner of record on the county tax website and/or register of deeds website. You can also ask the purported owner for photo identification to ensure it matches the public record.
2. If the purported owner will not identify themself, or they get angry or rude with you for your due diligence efforts, this is a red flag that a scam may be in the making. You can report your concern to local law enforcement (Sheriff/Police), and advise your clients to beware, make further investigation, and/or move on.           

Fake Seller Contacting Listing Agents

A listing agent received a call from the purported owner of a vacant lot located in a new subdivision about listing their lot. The listing agent did their due diligence by pulling the deedto  verify that the names matched, and then sent the listing agreement for digital signatures. Once the signatures were received, the agent put their sign in the yard. As luck would have it, again a neighbor was suspicious. After calling the rightful owner, the listing agent learned that the property was not for sale. The rightful owner showed up, called the agent on the sign and had the sign removed 3 days after the listing was posted.. Later that day the property was relisted with another broker who put their sign in the yard. Again this second listing broker was alerted to the fraud and removed their sign. The property owners now look daily to see if the property is listed for sale either on the MLS or on various websites.

            Action you can take:

1. If you are contacted by someone claiming to own land, take steps to verify the person you are communicating with matches the person on the deed. Ask for photo identification and get a copy for your records.  (See #1 and #2 above). 
2. When listing a property, check the history and contact the previous listing agent/firm if something seems strange about the listing (short time on market, sudden withdrawal) to see if there may be fraud or material facts that need to be disclosed.
3. If you encounter a property owner that has been a victim of multiple attempts to sell their property without their consent, encourage them to contact the following:
   1. FBI – to report the fraudulent activities and get assistance in stopping the perpetrator.  https://www.fbi.gov/how-we-can-help-you/safety-resources/scams-and-safety
   2. NC Attorney General – Fraud Hotline (877) 5NO-SCAM.  https://ncdoj.gov/

Fake Buyer Dodging Due Diligence Fee Payment

A homeowner receiving a job transfer listed their home for sale. The seller received a full price offer the first day with a quick closing. The seller contracted to sell the property and immediately contracted to purchase a home in their new town and submitted a Due Diligence fee equal to the amount of Due Diligence payment they were to receive from their home sale. The buyer made one excuse after another and the Due Diligence payment never came. The seller was told that the buyer was sorry and offered to raise the price $25,000 if the seller would wait until the closing to get the Due Diligence fee. When the seller went to the attorney’s office to sign the settlement documents, the seller learned that the buyer wasn’t real  and was trying to get the attorney to wire the proceeds of the sale to them. The seller was unable to purchase their new house, lost the Due Diligence fee they had paid, and was in serious danger of losing their job because they did not relocate. With the loss of the Due Diligence fee on the new home, the seller also was unable to make their next few mortgage payments.

            Action you can take:

1. As a real estate broker, part of your job is to advise your client about their options to help protect them in their real estate transaction. While you cannot force a client to take your advice, recommend best practices for their protection, preferably in writing. A prudent real estate broker would recommend the seller-client ensure they have the due diligence funds in hand before spending additional money  on a new property.
2. A prudent broker would be careful to ask for proof of funds, or prequalification information for the seller’s consideration prior to acceptance of an offer. If unable to verify, the broker should inform the seller and warn them of the possible outcomes if the buyer cannot perform.

Fake Seller Disappears After Receiving Due Diligence Fee

Someone claiming to own a property listed the property for sale and got multiple offers during the ‘Coming Soon’ period. A buyer went under contract and delivered a large Due Diligence fee that was wired to the seller’s account. The “seller” was never heard from again.

            Action you can take:

1. Verify the seller/client’s identity as mentioned above. While it is the listing agent’s duty to take reasonable steps to verify the identity of their client, if a red flag arises as to an owner’s identity, buyer agents can help protect their buyer client by requesting proof of seller identification from the listing agent, and verifying the name(s) against public records.
2. While brokers should not be involved in the transfer of funds, they should make every effort to educate clients on the dangers of wire fraud. 
3. Be aware that there are specific, intentional, and targeted attacks against buyers and sellers happening more and more frequently. Educate your clients and explain why you are taking more precautions for their safety and protection as well as your own. If you suspect something may be amiss with either the buyer or seller, do more investigation. A broker may wish to verify the identity of their client or the other principal by making sure they have the proper ID to be able to close. Available tools for this include a Google search of their name and the address, researching the obituaries, contacting neighbors, and checking social media sites like Linked-In and Facebook.

• As always, protect your principal’s personal information, such as social security number or bank account numbers.

Other Red Flags or statements to look out for:

1. The buyer/seller is traveling on vacation (sometimes abroad), claims they cannot meet in person, and has to do everything by email.

2. The seller has a family emergency, needs a quick cash sale, and will accept substantially less than full price if they can close in a very short time.

3. The email address or phone numbers are from another country. Of course, there are legitimate buyers and sellers who live overseas, but this does raise a flag that should be checked.

4. The photo IDs, such as drivers’ licenses or passports, are barely legible.

5. The Seller does not require a Due Diligence fee and/or low or no Earnest Money combined with a quick closing (in order to obtain quick proceeds before a scam is discovered).

6. The buyer/seller makes constant excuses, is not able to perform the terms of the contract, or is not returning paperwork.

7. The buyer/seller gets very angry at the broker as the transaction gets closer to closing and applies pressure on the broker to make sure the deal goes through. Sometimes they offer an incentive such as commission bonuses or promising other opportunities to buy or sell.

Remember to protect yourself and your client by asking questions and doing research when faced with red flags.

The January 2023 Commission Meeting will be in Wilmington!

The North Carolina Real Estate Commission is pleased to announce that it will be holding its January 18-19, 2023, business meeting and hearings in Wilmington, North Carolina. You are cordially invited to join the Commission members for coffee on Wednesday, January 18^th at 8:30, before the meeting begins, and to stay or attend the meeting at any time throughout the day. The business meeting is expected to begin Wednesday at 9:00 and to last until mid-afternoon.

The meeting will be held at:

EMBASSY SUITES WILMINGTON RIVERFRONT – SALON I

9 ESTELL LEE PLACE, WILMINGTON

The Commission members welcome the opportunity to meet you and hear your thoughts. While not required, we will appreciate your RSVP by January 11^th to exec@ncrec.gov for planning purposes.

Cybersecurity: Are you Secure?

Are you familiar with the type of cyberattacks used by hackers? Do you have cybersecurity policies and procedures?

The Cybersecurity and Infrastructure Security Agency (CISA) defines cybersecurity as the art of protecting networks, devices, and data from unauthorized access or criminal use and the practice of ensuring confidentiality and integrity, and availability of information.

Cybersecurity attacks are prevalent in brokerage transactions due to the nature of the business. There are various types of cybersecurity attacks; however, some of the most common cybersecurity attacks are:

• Business Email Compromise (BEC);
• Cloud Storage Attacks; and
• Smishing.

Business Email Compromise

A Business Email Compromise scam in a real estate transaction may occur when the email account of an individual (e.g. broker, attorney, principal) in the transaction is hacked. After the email is compromised, the hacker monitors the communication to extract relevant details such as the property description and associated closing costs. Once they have this information, the hacker sends a spoofed email (e.g. an email similar to the original account holder) so that future electronic communication is diverted to the hacker. Business Email Compromises are usually used to get unauthorized funds, access personal, confidential information, and/or W-2 forms, according to the Internet Crime Compliant Center.

Cloud Storage Attacks

Cloud storage providers allow brokers and brokerage firms to secure their data, collaborate with others, and access information from a variety of locations. Due to the magnitude of information that is stored in the cloud, hackers may attack the cloud storage provider by retrieving the passwords of users or the security tokens of a computer.

Smishing

Brokers routinely communicate with many different people using their cell phones and tablets. Therefore, they are susceptible to smishing scams. Smishing is similar to phishing. Phishing is defined as a scam that is sent via email to individuals. Similarly, smishing involves hackers sending links or attachments via text to gain access to confidential information. Brokers should be careful when receiving text messages, links, or attachments from unknown sources.

The National Association of Realtors® has created a resource entitled, Cybersecurity Checklist: Best Practices for Real Estate Professionals, to assist brokers with developing cybersecurity policies. Brokers may want to use some of the following best practices referenced in the checklist to proactively prevent a cybersecurity attack such as:

• using long, complicated passwords (e.g. phrases or a combination of letters, numbers or symbols);
• regularly purge email accounts;
• using encrypted emails;
• using two-factor authentication when accessing emails;
• keeping antivirus software and firewalls up-to-date; and
• regularly backing up critical data and confidential information.

The Cybersecurity Checklist: Best Practices for Real Estate Professionals article can be accessed here if you would like additional information. Also, the Commission published some information about Cybersecurity in the 2020-2021 Update Course. This content can be retrieved here.

If you have any further questions, please contact the Education & Licensing Division at 919.875.3700.

Current Stats: Monthly Licensee Count as of October 1, 2022