The real estate sector is falling victim to money launderers and the risk has noticeably risen since the digitization of its operations. The absence of regulatory checks is also creating room for criminals to exploit estates’ investments. To hide their malicious intentions, fraudsters buy and sell high-value properties either in one huge or multiple small transactions. Eventually, payment scams and money laundering directly affect real estate companies’ integrity.
Real estate firms require efficient investor verification services to secure property purchases. AI-powered IDV solutions help these companies run due diligence and also assess risks buyers or sellers may possess. This blog further entails how online investor verification protects the real estate industry against fraudulent investment schemes.
Investor Authentication – Drawing Contradiction in Potential Buyers and Fraudsters
Real estate companies are brokers or intermediaries that bridge worldwide sellers and buyers for property trading. A builder placing the first brick for a new town is eager to increase investor onboarding which will itself result in pacing up the construction and high revenue generation processes. The real estate agents connect potential buyers with legitimate organizations and builders.
Imposters with proceeds of crimes also target these companies to impersonate legit buyers and launder their funds into huge property projects. In case of inefficient investor verification services, real estate companies are sure to connect legit owners with risk-possessed entities. Similarly, the lack of regulatory and identification checks further paves the way for money launderers.
Investors often become a part of crowdfunding groups that help them identify projects that meet their requirements. In the case of real estate projects, the companies pitching potential buyers require robust know your investor services. AI-powered IDV solutions enable firms to perform due diligence, cross-validate sources of income, analyze financial records and check backgrounds. Ultimately, real estate companies can stay put with KYC/AML standards. Investor verification solutions further provide real estate companies with the following:
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Cross-Check Net Worth
Investor verification services provide accurate validation of net worth by authenticating sources of income and other financial records. Real estate companies can also analyze transactional behavior along with its history by easily accessing global databases. This helps in figuring out if the buyer was previously involved in money laundering or ever has been a part of any financial crime syndicate. Know your investor services assist real estate companies in streamlining the partnership-building process.
AI-powered investor verification services offer real-time identification of individuals along with authenticating their documents. They cross-check ownership details, credit reports, and transfer histories. By deploying OCR for data extraction, digital investor verification online services further eliminate inaccurate entries and human errors.
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Source of Income Validation
In order to differentiate between buyers with legitimate income and those with proceeds of crimes, real estate agents require the integration of investor verification services. They provide ongoing screening of transactions while validating their sources. In case a firm is opting for making investments, know your investor services help cross-verify its UBOs to ensure the employees do not possess fraud risks.
As per requirements by concerned authorities, real estate companies should onboard individuals that have an income of over $200,000. AI-powered investor verification services help firms pitch to the right and potential buyers by validating their annual earnings.
Investor Verification Solutions – Measures to Safeguard Real Estate Trading
Real estate companies often target potential investors who bring mutual benefits such as revenue generation for both owners and agents. However, fraudsters are also making their way into this industry for exploiting financial benefits. They either use synthetic identities to dodge investor authentication or use shell companies for reaping long-term revenues.
Investor verification services are becoming a must-have for real estate companies to assure profit-generating and risk-free relationships. Furthermore, it helps target potential buyers among a variety of them in the marketplace. Details regarding the most prominent types of investors are in the next section;
Crowdfunding Platforms
Crowdfunding refers to global lenders creating pools and making collective or individual investments. Real estate agents then become a part of these groups and while deploying advanced solutions to verify investors, pitch to the right individuals.
Real Estate Clubs
Large networks of high-net-worth buyers are known as real estate groups. They provide immediate investments in less time. Furthermore, these groups provide high chances of growth as they invest huge sums of money. Know your investor checks help real estate agents to identify and pitch to these individuals more easily.
Key Notes
Rapidly evolving technologies are accompanied by high criminal risks and financial scams exposing the real estate sector to trading abruptions. It has become challenging to draw a line between fraudsters and potential buyers. As criminals use shell companies or fake identities to make investments, property trading companies need to enact counteractions. Hence, investor verification services are enhancing security for real estate firms and opening the door to generating more capital.
