Cyber Security in Real Estate

2017 was an eye opening experience for me in regards to the rapidly increasing threat of cyber hacking.  We’ve all experienced the chaos from the breaches in security from major companies like Equifax, Target and many others.  For most people this causes a little concern, some brief paranoia and then life goes on.  In most cases, these breaches didn’t harm too many people, relatively speaking, at least not significantly.  My sister in law actually had her identity stolen in one of these incidents.  Some loser ran up one of her credit cards and tried to open another account.  The debt was forgiven and everything was straightened out.   This process was a major inconvenience for a very brief period of time.  Unfortunately, I can’t say the same for the other two experiences I was a part of, both real estate related.

I recently had a house on the market in my home town.  We took the pictures, did some advertising and had quick success, everything was great.   After about a week on the market, we received a full price offer and it was cash!  The buyer did her inspection, which went very well, and contracts were sent out.  Everyone was feeling great, until about two weeks later.  I called the buyer’s agent to ask why the contracts hadn’t been signed yet.  What I heard next was something I thought only happens in movies.  I never thought I would be involved in anything like this, ever!  The agent informed me that her buyer received an email from her lawyer to wire the $325,000 to his account so he can prepare for our upcoming closing.  As you might suspect, the buyer wired the money.  Of course, the lawyer had never sent such an email.  Either one of two things happened… either the cyber thief hacked the lawyers email account or created an email that looked very familiar, making a small change that would go unnoticed.   Needless to say, my seller was devastated, but our hearts went out to this poor woman who had just lost most of her savings.  To make it worse, she was a single mom looking to purchase her first home for her and her children.  Just typing this blog entry is making me get a little teary eyed again.  I’m not sure if she every recovered her money.  We had to sell to another family.

The image below shows an example of how a hacker can make a fake email:  Can you spot the difference? was changed to


scam b

My second experience was from a friend’s transaction in NJ.  After selling her mother’s co-op in NJ, the buyer’s attorney wired the proceeds of the sale to the seller, so he thought.   A few days after closing, my friend asked her mother’s attorney when she can meet with him to pick up her check from the sale.  He said, “There is no check, your mother asked the other attorney to wire it directly into her account”.  Yup, panic set in pretty quickly after that.  My friend told the lawyer that her mother is an old lady and would never do that, or even know how to do that.  At that point, they knew they were victims.  Luckily, my friend’s mother ended up getting her money from the attorney.  I don’t know if the attorney took the loss or if he was able to pay it through insurance somehow.  Either way, an attorney should know better.  That just goes to show you how good these scammers are!

PLEASE, PLEASE, PLEASE…. DO NOT wire anyone  money.  I’ve been in this business for a long time and it is not very often that money is wired between parties.  In the event that wiring money is to be done, make sure to first call your attorney and confirm how much money is being sent  and to where.

Buying A House With A Buried Oil Tank… Without Risk!

   This is a topic that causes a significant amount of unnecessary panic with many home buyers, especially first time buyers.  There are several myths out there, including that the seller is legally required to remove their underground oil tank.  There are also friends and family members who have scared potential buyers by saying that leaking tanks could cost $100,000 to remediate.   If you’re moving out of the city, it may be difficult to avoid houses heated by oil.  Unfortunately, many of these homes will have a buried oil tank.  While it is preferred that the tank be above ground, it is important to know exactly how to structure your purchase when it is buried.  I wouldn’t advise giving up on what can be your perfect family home because of an underground oil tank.

    First of all, sellers ARE NOT required to remove a buried oil tank, even if it has failed inspection.  I’ve sold several houses that have failed the tank test.  The seller is usually responsible for remediation.  However, in my few cases, the sellers didn’t have the ability to cover the cost.  When a tank fails, the tester is required to report his findings to the NYSDEC.   It is important to note that in most cases the tank fails due to air escaping from the pipe joints.  Obviously, this is not as significant as a failure caused by oil leaking from the tank.  Contaminated soil is what can get rather expensive.  The tester is able to specify the type of failure through his testing procedure.  They start by creating an air tight vacuum in the tank.  The tester then uses sophisticated audio equipment and a pressure gauge to monitor for leaks.  If the tank leaks, he can usually determine if oil or air is leaking out.

    Here is the proper procedure when purchasing a house with a buried tank.  The first step is to test the tank.  Assuming it passes, my purchase offer specifies that the owner will buy tank insurance and then transfer the insurance to my buyers at closing.  Of course, the buyer will reimburse the seller on the remainder of the policy.  ProGuard is the only company I’m aware of that offers the insurance.   If the tank then becomes an issue after you purchase the house, you are covered.  This is how you can buy a house risk free, in regards to the oil tank.  However, if the tank fails, there are a few more steps.  As I mentioned earlier, in most cases the seller corrects the issue by removing the tank and placing one above ground.  If the seller doesn’t have the money to do so, you can still move forward.  There is some risk in this scenario, but you can limit it.  I would recommend doing a soil sample around the tank to check for contamination.  Using those results, combined with the tester’s findings, you may determine that there is little risk.  The cost of removing the tank, without contamination, and replacing it is approximately $4,000.  I would recommend asking for a credit in that area.  On the other hand, if there is some contamination and the sellers are not working with you at all, I would recommend finding another home.  Luckily, it has been my experience that if handled correctly, a buried oil tank is not a deal breaker.  It would be a shame to miss out on your perfect home because the professionals you are dealing with don’t know what they are doing.

Is the listing agent lying about other offers?

I get this question/concern from buyer on almost every deal.  It’s not really a concern for me, which is easy to say since it’s not my money.  Luckily, we are in an area where the overwhelming majority of agents are honest and ethical.  My answer to this question is always the same.  I tell my clients, “I’m sure they’re not lying, but even if they are… it doesn’t matter.”

   It doesn’t matter?! Shouldn’t I care if my clients are being lied to?  Of course I do, but let me explain.  You don’t make offers based on what a listing agent tells you to do.  Offers are based on reviewing the comps and offering price that you think equates to a fair market value.  This market is definitely a little tougher as we are currently in a full blown seller’s market.  Almost every deal has multiple offers and many are going above asking price.  Therefore, in some cases you may have to offer a little higher than anticipated, if you want to make that specific property your home.  If you are convinced that the listing agent is lying, then call their bluff, put in your highest and best offer and if it’s meant to be it will come back to you.  That’s a calculated risk you’ll have to take depending on how badly you want the house.  My advice is to trust your agent’s gut feeling as they are communicating and building a rapport with the listing agent.  They can probably get an accurate feel of the situation over their several conversations with the listing agent.  If you don’t have a buyer’s agent, I have to ask if you are absolutely crazy (they are FREE!)…. But that’s a whole other blog.

   Now, for my opinion on if they are lying or not.  I’ve been doing this for a long time and I can’t say that I’ve ever come across a situation where I think the listing agent is lying about offers.  Perhaps, they’ve been a little unethical regarding other issues, but not so much lying about the offer.  Why is this?  Quite simply, it’s not worth the risk.  There is very little to gain.  First of all, if we get caught doing something unethically, we can put our license in jeopardy.  I can only speak for myself, but I’m not going to risk my career on trying to get a client an extra five or ten thousand dollars.  That makes no sense.   It also doesn’t seem logical to risk several hundreds of thousands of dollars on an offer that is already placed, to gain a few thousand during a negotiation.   For this same reason, it goes against the seller’s best interest to lie about an offer in an attempt to get more money.

Nightmare on Elm-sford

If you’re considering selling a house in Elmsford, please be prepared for a nightmare of a transaction.  I’m currently in the middle of two deals in the village, both are having significant issues.  I’m not going to kill the village of Elmsford in a rant here.    It’s understandable that they feel the need to put these rules in place to keep their community safe.  It’s obvious that there is a problem with owners/tenants overcrowding dwellings to the point where it becomes dangerous.  To correct this issue, they are doing walk through inspections prior to every sale to make sure that the house matches what is on the property card.  If it doesn’t, you’re in some serious trouble.  In my opinion, this is another form of government overreach, but again, I get why they feel it’s necessary.

In most cases, the municipality doesn’t throw themselves into the middle of a real estate transaction.  The agents, lawyers and title companies check for certificates of occupancy (CO) and violations.  As long as there are no violations, the lender is willing to close.  If there are items that are missing a CO, it is up to the individuals to determine a solution.  Obviously, in many cases, a buyer would want as much to be legalized as possible.  However, in some cases, this isn’t possible.  This could be due to the seller’s financial situation, impossibility of becoming legal, process involved or several other factors.  When this happens, buyers usually have the option of a credit/price reduction, rip out the item in question or buy as is and nobody says anything.  This is a very complex topic.  It also depends on what was represented by the sellers from the beginning.

In my opinion, this new rule is having a severe negative impact on the elderly, which both of my sellers happen to be.  Well, in one case it’s an estate, but same difference.  In both cases, the village is coming down hard on them for improvements that were made many decades ago, perhaps even 50+ years.  They were certainly there prior to the current owners.  It doesn’t seem fair that they were allowed to purchase the house like this, but now be forced to correct them in order to sell themselves.  In one case it’s costing my seller over $40,000.

In closing, I want to make it clear that I am totally supportive of local municipalities, their rules and their intention to keep the community safe.  Overall, the process does provide a set of safety standards.  However, I just think we should use some common sense on how to apply these rules and consider the negative effects they are having on certain individuals.  It’s unfortunate that they can’t rule on a case by case basis.

If you’re planning on selling your house, no matter where you live, please make sure all of your improvements are permitted.  This is one of the MANY reasons I always advise to work with an agent well before you are ready to go on the market.   I understand many agents are annoying and you want to wait until you’re absolutely ready, but in many cases there are issues to clear up before entering the market.

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