According to the FBI Internet Crime Complaint Center, real estate scams targeting the elderly have increased by 14% since 2022. Forged signatures, coercion, pressure tactics, fraud, and undue influence pressure campaigns have all been used to target the elderly. While many of the actions will only be addressable at a legislative level, real estate brokers can assist in reducing the impact of these criminal and deceptive practices.
To protect yourself and your clients, there are several measures that can be taken:
- Document everything clearly and follow up with your elderly client regularly. Follow up any oral conversations with a written recap, asking if the client agrees with your understanding of the exchange.
- Make it known that you are the agent of your client, specifically. When a client hires you, you do not work for their children, you do not work for their siblings, you do not work for their family members, you work for your client alone. At times, family members may demand that you include them in the conversations or otherwise filter information through them, on grounds that the elderly client has various health issues or dementia or is confused. If that is the case, the family member must prove to you that a proper power of attorney is in place — absent documents that allow the family member to speak for the client in this setting, you owe nothing to the family member and should not be including them in confidential client communications. It is wise to have your own independent attorney verify the validity of the power of attorney document, as there is a range of powers that can be granted. A family member could well have a power of attorney that authorizes them to handle the daily finances of your client without authorizing them to handle major things like sales of property.
- It is not improper to advise a client to delay a decision until they consult with an attorney over the impact and risk of a decision.
- Know the signs of elder abuse and be prepared to halt a transaction and seek legal counsel if abuse is suspected. Be aware that much of the financial abuse of elderly people is committed by people in positions of trust, such as family members or caretakers. Learn if the client has any sort of system of balances in place if someone else is managing their finances. Elder abuse is more easily perpetrated when there is singular control over financial and legal decisions.
- Client is not permitted to speak for themselves without the presence of a caregiver or family member
- Tension or arguments with the caregiver or family member
- Client shows signs of withdrawal or depression
- Sudden changes in finances the client cannot explain [e.g. Client suddenly does not have enough money for earnest money deposit]
- Signs of a lack of physical care.
- “Too-good-to-be-true” offers are oftentimes just that and scammers occasionally make special targets out of the elderly. Make sure your client has reasonable expectations and understands that fraudulent offers do exist in the real estate ecosystem. The following are warning signs of a scam targeting an elderly client:
- Unsolicited offers to sell or offers from out-of-town purchasers
- Refusal to use official notaries in favor of faster, digital notary processes with dubious security
- Pressure to make a decision immediately without proper consultation.
- Ambiguity or vagueness in the ways that an agent or a person responds to questions, or overuse of abbreviations and lingo to mask meaning.
- Seller agents should encourage the client to regularly review their property’s title with the county recorder to ensure no unauthorized changes have been made.
- Be cautious of advisors who press the client or demand that you make quick decisions or otherwise press the client away from consulting legal assistance.
- Ensure the client has stored important documents in a secure location.
- Be prepared to report suspected abuse to your local Adult Protective Services agency. Aoa.gov will have additional information and resources to assist you.