Artificial Intelligence (AI) has proven to be an essential technological tool for the real estate industry. AI-powered tools help industry players determine property value, make more informed decisions, research more effectively, and improve customer management and marketing strategies.
AI is also growing in stature in the fight against fraud in the real estate industry. For instance, scientists are leveraging Machine Learning (ML) algorithms to create models that predict the likelihood of fraud based on an array of factors. Real estate businesses use these models to assess risk and take proactive measures to prevent fraud.
Similarly, AI can help classify fraud patterns and automatically mark questionable activity after analyzing large datasets, preventing bad actors from executing schemes that result in losses for businesses and consumers.
Filtering Bad Real Estate Agents
Whether you’re a homebuyer or a home seller, the consequences of partnering with a bad real estate agent can be severe. Crooked realtors are known to mislead their clients, sell the same properties several times, or commit other financial or identity crimes.
And with home sales falling due to rising mortgage rates, some shady realtors are responding to the pressure of lower revenue by facilitating mortgage fraud.
Nobul, a disruptive marketplace, ensures that homebuyers and home sellers only match with authenticated and reputable real estate agents. Nobul uses sophisticated AI-powered algorithms to verify realtor reputations before allowing them on the platform.
In an interview with BNN Bloomberg, the founder and CEO of Nobul, Regan McGee, explained that young real estate buyers and sellers, such as millennials, demand clarity.
He shared, “This is what people are demanding nowadays, especially millennials. This is how they want to do everything. They want information, they want transparency, and they want it tech-enabled.”
Spotting Mortgage Fraud
As mentioned, mortgage fraud is rising due to rising interest rates. In addition to real estate agents, mortgage brokers and bank employees are engaging in dishonest practices. It’s not easy to catch fraud when experienced insiders who know the intricacies of the sector are involved.
This is where AI comes in. Sophisticated AI can catch nuances that the average industry fraud prevention professional may miss. For instance, AI trained with historical mortgage fraud data may cross-check an applicant’s inaccurate income statement directly with their banking data to find unusual patterns. It may directly alert lenders, who may re-examine a file after the warning.
Stopping Land Fraud
Artificial Intelligence, combined with another emerging technology is mitigating the risk of land fraud. AI-powered blockchain is offering property buyers and sellers the following advantages:
- Removes the need for intermediaries such as brokers who may sell the property several times, demand bribes, forge documents, or engage in other fraudulent activity.
- Verifies transactions to secure sales.
- Improves record keeping due to its immutable nature.
- Adds transparency for all participants.
- Utilizes decentralized IDs to ensure that land transfers are seamless.
Identifying Money Mules
The FBI defines a money mule as a person who shifts money illegally on someone else’s behalf. Money mules are useful to known fraudsters in the real estate industry to hide assets, move currency, launder cash, or commit fraud.
Some sophisticated AI-powered technology can leverage machine learning algorithms to identify accounts owned by money mules. Transfers deemed as suspicious are blocked until further investigation.
AI is playing its part in fraud prevention in the real estate sector. AI-powered solutions can detect fraudulent activity, secure transactions, and prevent bad actors from taking advantage of honest homebuyers and sellers. With the help of AI, the real estate industry can add security and transparency for everyone involved.