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November 10, 2011September 17, 2019

Are internet Realtor® reviews real or fake?

The internet is a great tool. It conveniently provides access to information about real estate activity and home sales to assist you in your decision making. It’s only natural that people tend to gravitate to the internet because it provides somewhat of a buffer from aggressive real estate agents; it allows a certain amount of anonymity. This may also be a reason for the rise in popularity of internet Realtor® reviews.

But, internet anonymity can be a two way street. Besides reading online what others are saying about your agent, without anyone being the wiser; online reviews are often posted without verification.

An August 19th New York Times article by David Streitfeld (In a Race to Out-Rave, 5-Star Web Reviews Go for $5: Printed August 20, 2011, on page A1 of the New York edition) is an exposé of the fake review business. Yup, fake online reviews. Streitfeld describes how in an effort for online businesses to appear better than the competition, “an industry of fibbers and promoters has sprung up to buy and sell raves for a pittance.” Streitfeld illustrates the “game” as it’s played; posts on websites such as Craigslist and help for hire sites offer a positive review for a fee.

Also known as “deceptive opinion spam” or “review spam, Cornell researchers claim “these fake reviews are fictitious opinions deliberately written to sound authentic, in order to deceive the reader.” They conclude that the detection of fake reviews is “well beyond the capability of human judges;” and recommend an analysis of reviews to include, among other things, psycho-linguistically motivated features. (Proceedings of the 49th Annual Meeting of the Association for Computational Linguistics, pages 309–319, Portland, Oregon, June 19-24, 2011.)

“There have always been fake reviews from employees and competitors,” states Greg Sterling, of Sterling Market Intelligence, in a March 7th blog post “Fighting the Rise of Paid Reviews.” Describing the increase of “guaranteed positive reviews” for a fee, “… the increasing importance of online reputation to consumers and the potential influence on rankings that reviews bring the stakes are higher than ever. Hence the emergence of services that will guarantee positive reviews.” He further states, “I don’t know this but my guess is that somewhere in some room … there are minions writing positive reviews without ever having actually used the business or visited its location.”

The National Association of Realtors® (NAR) code of ethics prohibits deceptive practices, which includes posting or encouraging fake reviews. However, Lani Rosales of AGBeat argues that there has always been an element posting fake Realtor® reviews and testimonials (“Sketchy new trend – hiring fake online review writers”).

What to do?

Suresh Srinivasan of agent reputation platform ReachFactor (ReachFactor.com) stated in email correspondence that review spam is a “big and growing problem. It’s extremely cheap to pay others …to write a review of any service professional.” He states that many websites get “gamed” because they only require the reviewer to register but don’t actually verify that a transaction took place with the agent. He points out that even though some popular real estate websites try to read every review, it is not entirely effective in weeding out the fake reviews. Mr. Srinivasan’s company verifies factual information collected about Realtors® so as to ensure consumer transparency as well holding Realtors® to a higher ethical standard.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

July 13, 2011July 28, 2019

The internet: a catalyst for change between real estate agents and their clients

Have you ever thought of how the internet has changed your personal relationships? Before the proliferation of social media on the internet, you may have related to your friends and family much differently than you do today. Whether you know it or not, your relationship with businesses has also changed; banking and shopping seem to be mostly initiated on the internet. And, of course, the internet has changed your relationship with your real estate agent.

Before public use of the internet was commonplace, real estate agents mostly met with their clients in person to review available home listings. Although many used the technology of the day (fax machine and telephone), a face-to-face meeting was still a necessity. As the internet flourished, early adaptations allowed real estate agents to correspond with clients via email (of course those who were sophisticated enough to have an email account).

As the internet evolved, so too did the business of real estate. And while surfing the internet became a regular daily routine (like your morning coffee); MLS services, Realtor® Associations, brokers and real estate agents all tried to capitalize on the latest technologies to capture business.

One could even try to make the argument that technology and the internet was an enabler of a real bubble that would eventually pop. Because house-hungry buyers wanted to be the first know about new listings and be able to present their offer before anyone else, internet applications were developed to adapt to that market need; internet applications were touted to automatically send listing alerts to buyers’ emails and cell phones. The increased use of mobile technologies such as texting and SMS, along with the ability to surf the internet on the cell phone allowed buyers to search homes anytime/anywhere. Tech savvy buyers could not only get notice of a new listing almost immediately, but they could also send an offer to the listing agent without ever leaving their chair!

Of course, many who hastily bought without inspections (or worse- sight unseen), realized that the internet was not a substitution for visiting the home and doing due diligence. The internet has since grown to become the leading source for real estate related information. What was once ballyhooed as the means of procuring clients is now realized as a tool to augment client relationships.

Certainly, the internet has not yet become the replacement for human interaction in real estate transactions. However, for better and worse, the maturing internet has impacted the relationship between the real estate agent and their client. Where at one time, the public solely relied on real estate agents for information; the public now relies on their real estate agent for specialized information and increased personal service. The business of real estate has shifted from selling the idea that real estate agents had the listings and all the related information, to not only selling personal and specialized services to facilitate the real estate transaction – but to assist the public in understanding the overwhelming barrage of data and information by providing meaningful interpretation and implementation.

Much like the effects to other financial industries, the internet has not totally replaced human interaction; but instead has changed relationships. At one time the internet was thought to become the virtual revolution; but in actuality has forced the real estate industry and agents to rethink their function and relationship with their clients.

by Dan Krell
© 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

February 2, 2011July 16, 2019

Protect yourself from the dark side of the internet: How to report internet real estate scams

There is no coincidence that the proliferation of the internet coincided with one of the largest housing booms in history. The value of receiving real time data was priceless when fierce competition to buy homes existed; having the information first often made the difference between getting a chance to make an offer on a home and missing out completely. Brokers, agents, and consumers readily adapted to new internet applications and technology increasing access to data and information sharing.

During the same time, the internet also became the preferred tool of the scammer. The internet offers scammers an easy venue to create false identities and find victims around the world. Although internet scams come in a variety of forms, internet real estate scams are becoming more prevalent.

To collect and research internet related criminal complaints, the Internet Crime Complaint Center (IC3.gov) was created as a collaboration between the Federal Bureau of Investigation (FBI.gov) and the National White Collar Crime Center (NW3C.org). Once known as the Internet Fraud Complain Center, the IC3 provides victims of internet crimes a “reporting mechanism” to alert authorities of possible criminal activity and/or civil infractions.

Numerous complaints regarding real estate internet scams prompted the IC3 to issue a warning in March 2010 to those who post ads on internet classified websites. Among the many forms of internet real estate scams, rental scams and duplicate real estate postings top the list.

Rental scams involve a potential tenant sending a deposit or rent check (usually without seeing the home). The scam is that the potential tenant will ask for their funds to be returned to them (either as an excess refund or a total refund) after their check is deposited in the victim’s bank account. Because the check appears to have cleared and the victim returns the funds, the victim later finds out that check was bogus and they are now responsible for the full amount of the scammer’s check.

Another scam garnering complaints is the duplication of legitimate real estate ads by scammers, posing as the home owner or real estate broker. This scam has the scammer posting a duplicate ad on internet classified sites using the wording and photos that are copied from the valid real estate ad (originally posted by the owner or the broker). The scammer creates a fake email address using the owner’s or broker’s name to make their post appear legitimate. When the victim responds to the fake post, they receive an email from the “owner” saying that the home needs to be rented while they are out of the country; the victim is asked to send funds out of the country to the “owner”.

Popular classified websites, such as Craigslist.org, warns consumers of internet scams. In addition to the warnings, Craigslist also posts tips to protect you from scammers. Craigslist says that if you follow their first tip “Deal Locally with Folks You Can Meet in Person…” you can avoid 99% of the scam attempts on their website.

FBI.gov (“Scams and Safety” link) and IC3.gov offer an extensive list of tips to protect you from real estate and other internet scams. If you are a victim of an internet scam, you can file a complaint with IC3; valid complaints are forwarded to local, federal, and/or international law enforcement and/or regulatory agencies for investigation.

By Dan Krell
Copyright © 2011

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Comments are welcome. This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

May 29, 2009October 5, 2019

Online Foreclosure Searches

by Dan Krell (c) 2009.
www.DanKrell.com

It’s no secret that foreclosure rates continue to climb. It is unfortunate that many home owners have lost their homes, but for some it is an opportunity to buy a home at a potential bargain price.

In past foreclosure markets the secret to finding a great deal was to communicate directly with the bank. If you knew where to look or whom to call, you could get each bank’s list of foreclosures and present your offer directly to the bank’s foreclosure department. In some cases, you could negotiate to buy a home as soon as the bank took title.

In today’s market, the game has changed significantly such that banks no longer directly deal with home buyers to sell their bank owned homes. These days, for a variety of reasons, banks hire real estate agents to list their foreclosures on the MLS. Even HUD lists their FHA foreclosures with real estate agents. You can still find each lender’s list of bank owned homes on their websites, but instead of providing the contact information of a bank representative the bank will refer you to the listing agent.

In an attempt to remain anonymous, many home buyers turn to the internet for information to minimize intrusions from seemingly aggressive real estate agents. The internet is chock full of websites advertising foreclosure listings, information and training; some services are free, while others charge a subscription fee. Two popular websites offering foreclosure listings are Realtytrac.com and Foreclosurepoint.com.

Along with the flood of foreclosures comes the increase of consumer complaints about foreclosure related businesses- including internet foreclosure web sites. Some companies may deceive the public to make money or to collect personal information. Some foreclosure sites use false advertising to lure home buyers to subscribe to their service; some attempt to attract and “hook” home buyers seeking foreclosure information to sell other real estate and/or ancillary services. Sometimes companies attempt to compile personal information to be sold to third parties.

On May 1st, one national company (operating multiple websites- including Foreclosuretown.com) was issued a “cease and desist” order by the North Dakota Attorney General for allegedly misleading the public (www.ag.state.nd.us). Wayne Stenehjem, Attorney General of North Dakota, followed up on many consumer complaints including the misrepresentation of foreclosures. The company over represented the number of foreclosures to lure consumers to pay a monthly fee to receive foreclosure lists. One consumer complained that his home was listed as a foreclosure even though he never missed a mortgage payment. Additionally, photos used to depict the listings were often not the actual homes; the photos may have misrepresented the actual size of the home by associating a much larger home than the actual listing.

If you are serious about buying a foreclosure or just interested wanting to seek information, why not work with a licensed Realtor? Local Realtors not only have access to the local MLS (where bank owned homes are listed for sale), but also have access to tools to identify pre-foreclosures as well as foreclosure auctions.

However, many accept the fact that home buyers wanting to remain anonymous will continue to turn to the internet. If you plan to use any internet foreclosure listing service, do your homework to make sure the company is legitimate and delivers what is advertised.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 18, 2009. Copyright (c) 2009 Dan Krell.

March 13, 2008October 5, 2019

Want to Buy Real Estate Online? (I have a bridge to sell you!)

by Dan Krell

Technology is great, isn’t it? You can do almost anything online these days; you can buy anything online, including real estate. Technological advances in the real estate industry have exploded in the last ten years to make it easier to for home buyers and real estate agents to complete transactions. Present technology allows you to almost complete an entire transaction from your desk. Now you can even bid on homes, from mansions to foreclosed homes, on various internet auction websites.

Sure, buying a home online might save you time, at least initially. But if there are problems with the home, you can bet you will spend lots of time and money to fix it. Nothing (at this present time) fully replaces physically viewing homes to get the full experience of the home and its surrounding neighborhood. Problems commonly encountered with real estate sold by internet auctions may include poor property condition, title issues, and location problems.

Would you buy a home from an online auction…without ever seeing the home in person? The term “buyer beware” may have more significance in this scenario as purchasing a home via internet auction may limit you on your ability to inspect the home.

Regardless of whether you are purchasing a home the traditional way or online, it is a good idea to have a home inspection. According to the American Society of Home Inspectors (ASHI), a home inspection will assist in your decision to purchase the home by revealing any major deficiencies and issues that need immediate attention. Additionally, the home inspection could provide information on regular maintenance as well.

Another problem that arises from internet real estate auctions is that you may be unaware if the property is land locked. Some believe it is safer to buy a vacant lot online than a home because there is no structure to worry about. Unfortunately, a property may physically sit behind other lots or homes with no access to the road. Without access, you would have to park your car and walk through your neighbor’s property to get yours.

If you are buying a lot online with the intention to build a home, having restricted or no access to the lot will pose a challenge. Without road access to the property, delivering materials and equipment necessary to build the home is almost impossible. Additionally, getting utilities to the home may also be a challenge as well, as there may not be a utility right of way or utilities may not be available at all.

Finally, buying a home through an internet auction may also restrict your ability to conduct a thorough title search. Hiring a title attorney to conduct a search and examination of the property’s title, will allow you to know if there are title issues (such as foreclosure, liens, or broken chain of title). It is important to make certain that you are being given a clear and marketable title.

Moreover, some question if internet real estate auctions are considered a binding purchase.

Perusing home listings on internet websites may be easy and tempting, however it is important to do your homework. No matter how you intend to buy a home, it is always a good idea to consult competent real estate professionals.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of February 25, 2008. Copyright © 2008 Dan Krell.